# cost case.pdf - Fly Ash Brick Project Feasibility Study...

• Homework Help
• 4
• 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 Analysis By: Jeremy Ruiz, Tomás Thomas, and Travis Hookham 1. 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 manager Financial Structure: ***We are including the financial cost as part of our fixed cost for this project Variable costs: Depending on the production volume, the company will pay a varying amount of operating cost per month. The table below is based on a production volume of 200,000 bricks per month Initial 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 + 40,000 7 4.50 ) = 138,000 interest ( ¿ cost ( routine expenses + personnelcost ) + Interest cost ( ¿ loan ) Price per unit Variablecost per unit ) = Quantity of bricks to