OMGT 4323 28 Mar Assignment

# OMGT 4323 28 Mar Assignment - Assignment 1 256 page 79 3A2...

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Assignment 1  2-56 page 79 3-A2 page 111  Due March 28, 2011 11:59:00 PM CDT - Please complete the problems and submit as an  attachment.  P79, 2-56 Boeing Break Even 1. Compute break-even point in number of 757-300 airplanes and in dollars of sales CM=\$65,000,000-\$45,000,000=\$20,000,000 BEP=fixed/CM=\$800,000,000/\$20,000,000=40 airplanes  at a sales value of  \$2,600,000,000 2. With plan to sell forty-two 757-300’s in 2005, what is projected profit? 42@\$65,000,000,000=2,730,000,000; this minus fix cost of \$800,000,000 and variable  cost of \$45,000,000 per plane (1,890,000,000) yield projected profit of \$40,000,000 3. Suppose fixed cost was increased by 84M and variable cost per plane was reduced by 2M. What would the profit be if they sold forty-two 757-300 airplanes?   42@\$65,000,000,000=2,730,000,000; this minus fix cost of \$884,000,000 and  variable cost of \$43,000,000 per plane (1,806,000,000) yield projected profit of  \$40,000,000 What would the break-even point be? CM=\$65,000,000-\$43,000,000=\$22,000,000 BEP=fixed/CM=\$884,000,000/\$22,000,000=40.2, with BEP in units = 41   airplanes   Comment on results. It is interesting that while the profit is the same as question #2, the BEP (due to

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## This note was uploaded on 05/16/2011 for the course OMGT 4323 taught by Professor Nethercutt during the Spring '11 term at Arkansas.

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OMGT 4323 28 Mar Assignment - Assignment 1 256 page 79 3A2...

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