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