This preview shows page 1. Sign up to view the full content.
Unformatted text preview: Sales -v a r iable expenses -f i xed expenses = net income For our break-even analysis net income would equal 0 and we could solve for N, or the number of units. The furniture equation break-even point would be as follows- 1344.05N- 367.25N- 1202080= 0 967.80N- 1202080= 0 967.80N= 1202080 N= 1230.63 units at the ratio of 13% high-end and 87% mid-grade furniture production. This would come out to 161.5 pieces of high-end furniture and 1069 pieces of the mid-grade furniture needing to be produced for Guillermo to hit the break-even point. Since his actual sales were high above this mark Guillermo Furniture Store is still, clearly profitable. If Guillermo is looking for a break-even point for his Flame retardant he would need to reduce his costs because his current cost is equal to the market price per liter and he would not make any profit regardless of the quantity of sales....
View Full Document
- Spring '10