You want to establish your own business and are thinking about releasing a new product. Customers will pay P150 for it, according to market research, and your sales team believes they can sell at least 1,000 units every month. The equipment you'll need to make the product will require a monthly fixed cost of P400,000 and lease of facility at P500,000. Costs of producing the product are direct labor P20, direct materials P15, shipping P5 and sales commission P10. What is the breakeven point? Will this be a profitable venture? Justify you answer.

You want to establish your own business and are thinking about releasing a new product. Customers will pay P150 for it, according to market research, and your sales team believes they can sell at least 1,000 units every month. The equipment you'll need to make the product will require a monthly fixed cost of P400,000 and lease of facility at P500,000. Costs of producing the product are direct labor P20, direct materials P15, shipping P5 and sales commission P10. What is the breakeven point? Will this be a profitable venture? Justify you answer.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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