Wk6_EYB_JTORRES_REVISIONS.docx

# Wk6_EYB_JTORRES_REVISIONS.docx - Week Number_6 Problem...

• Homework Help
• 2

This preview shows page 1 - 2 out of 2 pages.

Week Number__6 __ Problem Number _ 3 ___ W6.3 Group Members who worked on this problem: A company that manufactures a special brand of road bicycle has \$200,000 in fixed expenses to produce a new brand of bicycle. Each bicycle produced can be sold for \$1350 and costs \$650 to make. Let x represent the number of bicycles made in the first year. For this business venture: a. Write the cost function, C(x). b. Write the revenue function, R(x). c. Determine the break-even point. Describe what this means. Calculations Explanations of Calculations a.) C ( x )= 200,000 + 650 x Cost function is C(x) = Total fixed costs + Variable Cost × Number of units sold/made or (x). b.) R ( x )= 1,350 x Revenue Function R(x) = Price of the unit × Number of units sold or made (x). (In this case we use x, we weren’t given a number) c.) B. E.P = ¿ Cost Sales Price per unit varible price per uni B. E.P = 200,000 1,350 650 B. E.P = 200,000 700 B. E.P≈ 285.71 B.EP = 286 Bicycles (Answer) The break-even point analysis is a way to calculate margin of safety by comparing the amount of units that must be

Subscribe to view the full document.

• Spring '15

### What students are saying

• As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

Kiran Temple University Fox School of Business ‘17, Course Hero Intern

• I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

Dana University of Pennsylvania ‘17, Course Hero Intern

• The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

Jill Tulane University ‘16, Course Hero Intern