Development Cost Prototype Phase 35 53 First Month of Sales 57 Fixed Costs 61 53 65 69 First Month of Profit Manufacturing Phase Product Table 5.2: Break-even analysis for the project based on manufacturing 500 units per year RM Fixed Costs (for 500 units, per annum) Business Lease 60,000 Property Taxes 22,000 Insurance 18,000 Utilities 3,000 Development Cost 2,500 Executive Salaries 25,000 On-site Equipment 150,000 Manufacturing 80,000 Post-processing 40,000 Maintenance 30,000 Total Fixed Cost 430,500 Materials 4,000 Labour 6,000 Manufacturing Maintenance 5,000 1,500 Overhead 750 Logistics 500 Total Variable Cost per Unit 17,750 Break Even Selling Price per Unit 25,000 Profit (Selling Price - Variable 7250 Cost) per Unit Units to Break Even Profit Targets Units to generate RM50,000 profit and RM 100k profit respectively 60 67 & 74

Development Cost Prototype Phase 35 53 First Month of Sales 57 Fixed Costs 61 53 65 69 First Month of Profit Manufacturing Phase Product Table 5.2: Break-even analysis for the project based on manufacturing 500 units per year RM Fixed Costs (for 500 units, per annum) Business Lease 60,000 Property Taxes 22,000 Insurance 18,000 Utilities 3,000 Development Cost 2,500 Executive Salaries 25,000 On-site Equipment 150,000 Manufacturing 80,000 Post-processing 40,000 Maintenance 30,000 Total Fixed Cost 430,500 Materials 4,000 Labour 6,000 Manufacturing Maintenance 5,000 1,500 Overhead 750 Logistics 500 Total Variable Cost per Unit 17,750 Break Even Selling Price per Unit 25,000 Profit (Selling Price - Variable 7250 Cost) per Unit Units to Break Even Profit Targets Units to generate RM50,000 profit and RM 100k profit respectively 60 67 & 74

Understanding Business

12th Edition

ISBN:9781259929434

Author:William Nickels

Publisher:William Nickels

Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment

Section: Chapter Questions

Problem 1CE

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