{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

# ch03 - Chapter 3 Answers to Problems 2 Breakeven Quantity =...

This preview shows pages 1–3. Sign up to view the full content.

Chapter 3 Answers to Problems 2. Breakeven Quantity = Fixed Cost / (Selling Price-Variable Cost) = 120,000/(55-35) = 6,000 patients 4. a. Breakeven Quantity = Fixed Cost / (Selling Price-Variable Cost = 500,000/(350-200) = 3333.3, so 3334 printers exceeds the breakeven b. The operations considerations required for this decision are many. Among them are product design, process selection, supply chain management, facility location, employees, inventory management, and scheduling. 6. Breakeven Quantity = Fixed Cost / (Selling Price-Variable Cost) rearranges to: Selling price = (Fixed Cost/Quantity) + Variable Cost = 25,000/12,000 + 35 = \$37.083 Therefore, the spa needs to charge at least \$37.09 to avoid losing money on the spa.

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
8. a. Breakeven 0 100000 200000 2,000 4,000 6,000 8,000 Quantity Total Dollars Total Cost Total Revenue Breakeven Quantity = Fixed Cost / (Selling Price-Variable Cost) = 70,000/(20-8) = 5,833.3 Fine does better than breakeven at 5,834 units b. contribution to Profit = Total Revenue-Total Cost = SP(Q)-[FC+VC(Q)] = 18(15,000) - [70,000+8(15,000)] = \$80,000 c. contribution to Profit = Total Revenue-Total Cost = SP(Q)-[FC+VC(Q)] = 20(12,000) - [70,000 + 8(12,000)] = \$74,000 Setting the price at \$18 is more profitable by \$6,000.
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

### Page1 / 4

ch03 - Chapter 3 Answers to Problems 2 Breakeven Quantity =...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document
Ask a homework question - tutors are online