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Break Even point in dollar sales = ??
QO.B.E = 833.33 Unit QO.B.E = 833.33 × 25
Break Even point in dollar sales = $ 20,833.25
4/16/2012 Managerial Finance_An-Najah University 20
E–2 The Great Fish Taco Corporation currently has fixed operating costs of $15,000, sells its premade tacos for $6 per box, and incurs variable operating costs of $2.50 per box. If the firm has a potential investment that would simultaneously raise its fixed costs to $16,500 and allow it to charge a per-box sale price of $6.50 due to better-textured tacos, what will the impact be on its operating breakeven point in boxes? Given : FC1= $15,000 P1= $6 per unit VC= $2.5 per unit
QO.B.E = FC (P - VC) QO.B.E = 15,000 (6 – 2.5) QO.B.E 1= 4285.7 units
Given : FC2= $16,500 P2= $6.5 per unit VC= $2.5 per unit
QO.B.E =
FC (P - VC)
QO.B.E = 16,500 (6.5 – 2.5) QO.B.E 1= 4125units
QO.B.E 1= ??
QO.B.E 2= ??
Impact of changes in fixed operating cost and in price per unit on operating breakeven point: QO.B.E 1 = 4285.7 > QO.B.E 2 = 4125 which means that even though there was an increase in fixed operating costs that have a positive effect on breakeven point in case 2, but there was also an increase in price per unit that have a negative effect on breakeven point, and the negative effect had a larger impact than the positive …show more content…
Last year the book of puzzles sold for $10 with variable operating cost per book of $8 and fixed operating costs of $40,000. How many books must JWG sell this year to achieve the breakeven point for the stated operating costs, given the following different circumstances? a. All figures remain the same as for last year. b. Fixed operating costs increase to $44,000; all other figures remain the same. c. The selling price increases to $10.50; all costs remain the same as for last year. d. Variable operating cost per book increases to $8.50; all other figures remain the same. e. What can you conclude from the previous results? e.
QO.B.E = 833.33 Unit QO.B.E = 833.33 × 25
Break Even point in dollar sales = $ 20,833.25
4/16/2012 Managerial Finance_An-Najah University 20
E–2 The Great Fish Taco Corporation currently has fixed operating costs of $15,000, sells its premade tacos for $6 per box, and incurs variable operating costs of $2.50 per box. If the firm has a potential investment that would simultaneously raise its fixed costs to $16,500 and allow it to charge a per-box sale price of $6.50 due to better-textured tacos, what will the impact be on its operating breakeven point in boxes? Given : FC1= $15,000 P1= $6 per unit VC= $2.5 per unit
QO.B.E = FC (P - VC) QO.B.E = 15,000 (6 – 2.5) QO.B.E 1= 4285.7 units
Given : FC2= $16,500 P2= $6.5 per unit VC= $2.5 per unit
QO.B.E =
FC (P - VC)
QO.B.E = 16,500 (6.5 – 2.5) QO.B.E 1= 4125units
QO.B.E 1= ??
QO.B.E 2= ??
Impact of changes in fixed operating cost and in price per unit on operating breakeven point: QO.B.E 1 = 4285.7 > QO.B.E 2 = 4125 which means that even though there was an increase in fixed operating costs that have a positive effect on breakeven point in case 2, but there was also an increase in price per unit that have a negative effect on breakeven point, and the negative effect had a larger impact than the positive …show more content…
Last year the book of puzzles sold for $10 with variable operating cost per book of $8 and fixed operating costs of $40,000. How many books must JWG sell this year to achieve the breakeven point for the stated operating costs, given the following different circumstances? a. All figures remain the same as for last year. b. Fixed operating costs increase to $44,000; all other figures remain the same. c. The selling price increases to $10.50; all costs remain the same as for last year. d. Variable operating cost per book increases to $8.50; all other figures remain the same. e. What can you conclude from the previous results? e.