Break+Even+Answers+to+practice+problems_1_

Break+Even+Answers+to+practice+problems_1_ - be answer 400...

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Break Even Answers to practice problems Gregory would need to sell 500 games to break even 35X -21X = $7000 14X = $7000 X = $ 7000/14 X = 500 What are his sales in dollars to break even? If you don’t have the break even point yet use this formula: sales = fixed cost / CM ratio X = $7000 / .40 X $17,500 or If you do have the break even point, multiple the units needed by the sales price 500 X $35 = $17500 What if he increased his sales price to $38.50 what will his new break even point(s)
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Unformatted text preview: be? answer: 400 games or $15,400 If he used better technology and increased his variable costs to $25 per unit and expected a 10% increase in sales vol., Would it be a wise investment? Answer: No, he would actually be losing $1500 At what sales vol would he break even again? 700 units How many games would he have to sell (assuming original price/cost figures) to make a quick $1500 for spring break? Answer: At least 608 games!...
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This note was uploaded on 01/09/2011 for the course SMG 121 taught by Professor Arnold during the Spring '08 term at BU.

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