1. An ice cream producer has fixed costs of $70,000 per month, and it can produce up to 15,000 icecream tubs per month. Each tub costs $10 in the market while the producer faces variable costs of $3per tub. (a) What is the economic breakeven level of production? (b) Calculate the ice cream producer'smonthly profits at full capacity. What would happen to the monthly profits if another ice creamproducer entered the market, driving the price of the ice cream tubs down to $7 per unit? Support yourcalculations graphically.

Break even point production level is where there is no profit and no loss for Company.

Answered: am tubs per month. Each tub costs $10…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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A small coffee shop currently offers a cup of cafe latte for P107. The variable costs are P62 per cup, and 10.346 cups are sold annually anda profit of P200,577 is realized per year. A new design in making the coffee will increase the variable costs by 20% and Fixed Costs by 10% but sales will increase to 12,003 cups per year. If we employ the new design, at what selling price do we break even? Next No new data to save. Last checked at 2:26pm Submit Quiz IOLYANGEL 100% 31°C Haze DELL
XYZ company currently sells 15,000 units a month for $50 each, has variable costs of $10 per unit, and fixed costs of $300,000. The company is considering increasing the price of its units to $60 per unit. If the price is changed, how many units will the company need to sell for profit to remain the same as before the price change? Select one: O a. None of the given answers. O b. 7,500 O c. 11,250 O d. 9,000 O e. 12,000
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Company XYZ is planning to sell 20,000 units at a price of $5 per unit during the month of December. The company has total fixed costs of $60,000. Assume a planned margin of safety of $14,000, what is the breakeven point in ($) value? Select one: O a. 86,000 O b. 46,000 O c. 26,000 O d. 40,000 O e. None of the given answers
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) A plant has a capacity of producing 80T units per year of a product which it sells for P20.00 per unit regardless of output. The annual FC are P280T & a variable cost of P480T at 75% capacity. a) What is the break-even point in units? b) What is the fixed cost per unit and variable cost per unit at the break-even point? c) What is the profit at this level (75%) and at 100% capacity? d) At what volume of output will the company incur a loss?
A small coffee shop currently offers a cup of cafe latte for P106. The variable costs are P58 per cup, and 10,113 cups are sold annually and a profit of P200,617 is realized per year. A new design in making the coffee will increase the variable costs by 10% and Fixed Costs by 20% but sales will increase to 12,043 cups per year. If we employ the new design, at what selling price do we break even?
A small coffee shop currently offers a cup of cafe latte for P106. The variable costs are P63 per cup, and 10,079 cups are sold annually and a profit of P200,917 is realized per year. A new design in making the coffee will increase the variable costs by 20% and Fixed Costs by 10% but sales will increase to 12,411 cups per year. If we employ the new design, at what selling price do we break even?
2. Company XYZ sells CDs. The price of its new CD is $15. Fixed costs are $1,500,000 per year. Variable costs are $9. The company expects to sell 300,000 units this year. a. How many DVDS will the company need to sell to break even? b. If the forecasts are correct, how much will company XYZ make or lose this year (before taxes)?
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