Op Man HW 3 Chapters 6 &amp; 7

# 75perpac k age thes ellingpric ewillbe1250perpac k

This preview shows page 1. Sign up to view the full content.

This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: ing s oftware for a loc al dis tribution c ompany in Indiana. The annual fix ed c os t is \$15,000 for this proc es s , direc t labor is \$4.00 per pac k age, and material is \$4.75 per pac k age. The s elling pric e will be \$12.50 per pac k age. a. What is the break ­ev en point in units ? (Do not round interm ediate calculations. Roundup your answer to the next whole num ber.) Break ­ev en point 4,000 ± 1 units b. How muc h rev enue do we need to tak e in before break ing ev en? (Round your answer to the nearest dollar am ount.) Break ­ev en point \$ 50,000 ± 1 Explanation: a. The break ev en point is where total c os t equals total rev enue. Total c os ts inc lude the fix ed c os t (FC) plus the v ariable c os t (VC) times the number of units s old (Q). (In this c as e the unit v ariable c os t is the s um of the c os t of material and the c os t of labor.) Total rev enue equals the s elling pric e (SP) times the number of units s old (Q). Solv e for the v alue of Q that s atis fies the followin...
View Full Document

## This note was uploaded on 01/29/2014 for the course MAN 4504 taught by Professor Georgekyparisis during the Fall '09 term at FIU.

Ask a homework question - tutors are online