Computer Based Information SystemsProject - Breakeven AnalysisBeautiful Pots, Inc., a producer of pottery, is considering the addition of a new plant toabsorb the backlog of demand that now exists. The primary location being consideredwill have fixed costs comprised of $2,000 in rent for a building and $7,200 in salaries permonth. The variable costs are comprised of 30 cents for labor, 30 cents for material, and10 cents for utilities per unit produced. Each item is sold to retailers at a price of $1.50.1. What volume per month is required in order to break-even?2. What profit would be realized on a monthly volume of 61,000 units? 87,000 units?3. What volume is needed to obtain a profit of $16,000 per month?4. What volume is needed to provide revenue of $23,000 per month?5. Include a data table to show alternative break-even points, assuming variationsin salaries and labor costs. Assume values of labor cost per unit from $ 0.20 to $0.60 (increments of $ 0.05) and salaries from $5,000 to $ 9,000 (increments of $400) for your analysis.6. Plot the total cost, revenue, and profit lines.

Step 1:Break-Even VolumeFixed Costs per Month:Rent: $2,000Salaries: $7,200Total Fixed Costs:…

Answered: Computer Based Information Systems…

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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Middle Industries produces a sensor for use in manufacturing. It produces the sensor in a plant with an annual practical capacity of 75,000 units. The variable cost of the sensor is $185.00 per unit, and the fixed costs of the plant are $12,375,000 annually. Current annual demand is 55,000 sensors. Middle Industries bought the plant because it was close to its other manufacturing facilities and was available for sale when they were searching for a location. Required: What cost per sensor should the cost system report to facilitate management decision making? What is the cost of excess capacity? What cost per sensor would the cost system report if the smallest manufacturing plant that could be built was able to produce 75,000 sensors? What would be the cost of excess capacity?

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