accounting73
25.11.2020 •
Mathematics
If Gabe's Soccer Ball Company is able, due to competitive pressure, to charge $60 for a new soccer ball, while one soccer ball costs $28 to make, plus $15,000 per month in overhead costs (mostly Gabe's extravagant salary) find: a. The average cost c(x) of producing each soccer ball b. Algebraically find the number of soccer balls Gabe's company must produce per month in order to break even (Profit = 0). Profit = Total Revenue – Total Cost c. Algebraically find the number of soccer balls Gabe's company must make to earn a profit of $10,000 per month. d. If Gabe took a pay cut to reduce the overhead costs to $8,000 per month, how many fewer balls would the company have to sell to break even. (There are multiple ways to get this result).
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Ответ:
Results are below.
Step-by-step explanation:
Giving the following information:
Selling price= $60
Unitary variable cost= $28
Fixed costs= $15,000
First, we need to calculate the average total cost:
Average cost= total cost / number of units
For example, for 1 unit and 10,000 units:
1 unit:
Average cost= 15,028/1 = 15,028
10,000 units:
Average cost= (15,000 + 28*10,000) / 10,000
Average cost= $29.5
Now, we can calculate the break-even point in units:
0= (60*x) - (28*x) - 15,000
x= number of units to break-even
0= 32x - 15,000
15,000/32= x
468.75=x
break-even point in units= 469
For the desired profit of $10,000:
10,000 = (60*x) - (28*x) - 15,000
25,000= 32x
781.25= x
Break-even point= 782 units
Finally, fixed costs dropped by $8,000:
0= 32x - 7,000
x= 7,000/32
x= 218.75
Break-even point= 219
Difference= 250 units
Ответ: