FIN 200 RE: Break Even Analysis A. What is the break-even point in bags? Formula: FC/P – VC $80‚000/$10-5 (0.10 x 50 lbs = $5.00) $80‚000/$5 Break-Even Point would be $16‚000 B. Calculate the profit or loss on 12‚000 bags and on 25‚000 bags 12‚000 bags 12‚000 x $10 = 120‚000 80‚000/$5 x 12‚000 = $80‚000 + $60‚000 = $140‚000 120‚000 – 140‚000 = -20‚000 loss 25‚000 bags 25‚000 x $10 = 250‚000 80‚000/$5 x 25‚000= 80‚000 + 125‚000 = 205‚000 250‚000 – 205‚000 = 45‚000
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Definition of Break Even point: Break even point is the level of sales at which profit is zero. According to this definition‚ at break even point sales are equal to fixed cost plus variable cost. This concept is further explained by the the following equation: [Break even sales = fixed cost + variable cost] The break even point can be calculated using either the equation method or contribution margin method. These two methods are equivalent. Equation Method: The equation method centers on
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per patient per day = $300 x 0.333 = $100 Break Even Analysis for Question a To calculate the minimum number of patient-days for pediatrics to break even‚ for the year ending June 30‚ 2012‚ we know that no additional beds will be rented. We also know that patient demand is unknown and that other factors remain the same as for the year ending in June 30‚ 2011. Based on what we know so far‚ we use the pX = a + bX formula to get the break-even point‚ in which X = Minimum Number of Patient-Days
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What how do you even hihihskhksgigsia Skgskgskgskus Skagksgiusgkus Skabkakabkuabuka A computer is a general purpose device that can be programmed to carry out a set of arithmetic or logical operations automatically. Since a sequence of operations can be readily changed‚ the computer can solve more than one kind of problem. Conventionally‚ a computer consists of at least one processing element‚ typically a central processing unit (CPU)‚ and some form of memory. The processing element carries
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and break up the monopoly of the 747‚ but it didn’t have a product to compete with Boeing’s 747. Compared to the 747‚ the A3XX provides more advantageous features which would attract passengers especially on the longer routes‚ such as more space per seat‚ four-engine plane‚ etc. The combination of increased capacity and reduced costs would provide superior economics. Airbus felt confident that capacity increases would eventually prevail. As we stated above‚ Airbus’s objectives are to break up the
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Calculating the break-even point To avoid making a loss every business must at least break-even by achieving a level of sales that covers its total costs. But what level of sales is necessary to break-even? To explore the concept of break-even‚ we need to define some basic terms: Fixed costs: Costs that do not vary with output or sales e.g. managers salaries‚ rent and rates on business premises. Variable costs: Costs that vary with the quantity produced or sold e.g. costs of materials
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method do you prefer to use? b) Break-Even Analysis – Systems of Equations Application Problem Suppose a company produces and sells pizzas as its product. Its revenue is the money generates by selling x number of pizzas. Its cost is the cost of producing x number of pizzas. Revenue Function: R(x) = selling price per pizza(x) Cost Function: C(x) = fixed cost + cost per unit produced(x) The point of intersection on a graph of each function is called the break-even point. We can also find the break-even
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In order for Jane to establish her Break-even for one month‚ she needs to identify and calculate the following Firstly‚ Jane needs to gather all her products with their Cost Price (Variable Cost per item) as well as her Selling Price. By identifying each products’ selling price and cost price‚ Jane can determine the difference – The Profit. This helps establish her fixed costs in which are referred to as the direct costs of production. This ensures how many need to be made and sold to cover
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as a Word document. 1. You want to use break-even and target profit analysis with respect to the introduction of a new product in the marketplace. Your manager says you are wasting your time because the best determination of profitability is the income statement after this product has been introduced. Explain why your manager is wrong. In order to fully understand the process of profitability within a business‚ we must understand what break-even and target profit analysis represent and the function
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contribution/sales ratio. In proposal 2‚ an additional product W is added to the mix. So the fixed cost is increased. Although the fixed cost is increased‚ the profit increases sharply. What is noteworthy is that breakeven point is the largest in the 3 situations. It means that the company should take longer time to reach the breakeven point. So the company many have more risk. The recommendation is made on the basis that the company has the capacity to produce all products. The company should be confident that
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