100%(6)6 out of 6 people found this document helpful
This preview shows page 1 - 3 out of 4 pages.
Fly Ash Brick Project: Feasibility Study Using CVP AnalysisBy: Jeremy Ruiz, Tomás Thomas, and Travis Hookham1.Classify the company’s costs/expenses into fixed costs, variable cost and initial investment.Fixed costs:No matter how much volume the company produces, it will have to pay these costs.***Included Rajiv Sharma in personnel cost because he will work full time as the project managerFinancial Structure:***We are including the financial cost as part of our fixed cost for this projectVariable costs:Depending on the production volume, the company will pay a varying amount of operating cost per month. The tablebelow is based on a production volume of 200,000 bricks per monthInitial Investment:
2. Find the breakeven point and plot a CVP graph.To cover operating and financing costs, the Fly Ash Brick Project needs to sell 138,000 bricks per month.(95,000+210,000+40,0007−4.50)=138,000interest(¿cost(routine expenses+personnelcost)+Interest cost(¿loan)Price per unit−Variablecost per unit)= Quantity of bricks to