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Question 1: Breakeven Point Analysis a) How many units need to be produced to at least breakeven? (10 points) Fixed Costs: \$9,600 (12) + \$140, 000 + \$10, 000(12) = \$375,200 (3pts) Variable Costs: \$3.00 + \$5.00 + \$4.00 = \$12.00 (3 points) Selling Price: \$15.00 BEP = FC / UC = 375,200/ 3.00 = 125,066.67 units ( 4points) b) Using the above information, draw a breakeven diagram and properly label all appropriate points. (10 points) **BEP in dollars = 125,066.67 units * 15.00 = \$1,876,000 1 point for drawing diagram 125,066.67 Breakeven point (2 points) Fixed Costs (1 point) Units Produced (1 point) Dollars (1 point) Total Costs (1 point) Total Sales (1 point) Profit (1 point) Loss (1 point) \$1,876,00 \$375,200

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Question 2: Economic Order Quantity You are given the following data for the ABC Corporation: Cost per unit: \$100.00 Annual demand for good: 500,000 units Cost to place an order: \$50.00 Annual cost to carry inventory: 15% a) Calculate the Economic Order Quantity. (5 points) EOQ = √ 2(A)(S) / (I)(C)
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