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BigGirlsTheBest
05.03.2020 •
Business
Markland Manufacturing intends to increase capacity by overcoming a bottleneck operation by adding new equipment. Two vendors have presented proposals. The fixed costs are $ 60 comma 000 for proposal A and $ 75 comma 000 for proposal B. The variable cost is $ 13.00 for A and $ 11.00 for B. The revenue generated by each unit is $ 24.00.What is the break-even point in units for proposal A?What is the break-even point in units for proposal B?
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Ответ:
Proposal A: 5,455 units
Proposal B: 5,770 units
Explanation:
The break-even point is the number of units required for the revenue to equal the total costs.
For proposal A:
Fixed Costs = $60,000
Variable Costs = $13 / unit
Selling Price = $24 / unit
For proposal B:
Fixed Costs = $75,000
Variable Costs = $11 / unit
Selling Price = $24 / unit
Rounding up to the next whole unit, the break-even points for proposal A and B, respectively, are 5,455 and 5,770 units.
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