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ser-zykov [4K]
3 years ago
5

A company is considering opening a new product line. The building being considered will have a monthly lease and utility payment

of $3500. Two employees will be hired at $ 15/hr/employee. Each employee will work 120 hrs per month. The average revenue per unit product sold is estimated at $ 100. The variable cost of production of each unit is estimated at $40.
Required:
a. How many units must be produced each month for the buisness to breakeven?
b. How many units must be produced monthly to achieve a monthly profit of $10,000?
Business
1 answer:
abruzzese [7]3 years ago
4 0

Answer:

Results are below.

Explanation:

<u>First, we need to calculate the total fixed costs:</u>

Total fixed costs= 3,500 + (120*2*15)

Total fixed costs= $7100

<u>Now, using the following formula, we can determine the break-even point in units:</u>

Break-even point in units= fixed costs/ contribution margin per unit

Break-even point in units= 7,100 / (100 - 40)

Break-even point in units= 118.33 = 119 units

<u>Finally, the number of units to earn $10,000 in profit:</u>

Break-even point in units= (fixed costs + desired profit) / contribution margin per unit

Break-even point in units= (7,100 + 10,000) / 60

Break-even point in units= 285

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3 years ago
20.Assume that you just graduate and get a job. You will work for 40 years and save each year before you retire. During retireme
amid [387]

Answer:

How much money will you need to have at the moment you retire?

  • $1,287,858

How much money do you need to save every year before retirement?

  • $4,971.33

Explanation:

we have to first determine the amount of money you need to finance your retirement distributions:

using the annuity due present value formula, PV = annuity payment x annuity due factor (PV, 8%, n = 40)

PV = $100,000 x 12.87858 = $1,287,858

now we must use the ordinary annuity future value formula, FV = annuity payment x annuity factor (FV, 8%, n = 40)

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4 0
3 years ago
What are the central concerns of economics?
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3 years ago
Where can aspiring entrepreneurs go to get their questions answered?
Nataliya [291]
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5 0
3 years ago
Dollar Co. sold merchandise to Pound Co. on account, $25,500, terms 2/15, net 45. Pound Co. paid the invoice within the discount
aniked [119]

Answer:

$24,990

Explanation:

2/15 net 45 means that if the customer pays within the period of 15 days, he will get the discount of 2% of invoice amount, otherwise he has to pay the whole amount of invoice within the period of 45 days.

In the given scenario, since the Pound Co. has paid the invoice within the discount period, so therefore, the Pound Co. has availed the discount of 2% and accordingly the sales amount shall be recorded as follows:

Sales amount=Invoice amount*98%

                       =$25,500*98%

                       =$24,990

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3 years ago
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