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    keyshuna's Avatar
    keyshuna Posts: 6, Reputation: 1
    New Member
    		  
    #1

    Mar 5, 2006, 06:05 PM
    Break even
    Product Alpha has been a staple in Omega Corp.'s product line for several years. Annual fixed costs of production and administration related to this product in the past have been $643,500. Annually, variable costs of production and sales have been $17 per unit. The selling price in the past has been $28 per unit. Based on the appearance of competing products on the market, management has asked you to do the following:
    (a) Compute the breakeven point in units and sales in dollars for the present product.


    (b) Compute the breakeven point in units and sales dollars if the variable costs increased by $3 per unit and the fixed costs increased by $14,375 per month.

    (c) Using the information from (b) an expected additional monthly advertising charge of $10,000, and a monthly sales rate of 15,000 units, compute the competitive selling price that the company must obtain in order to have a profit of $32,000 per month.
    CaptainForest's Avatar
    CaptainForest Posts: 3,645, Reputation: 393
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    #2

    Mar 5, 2006, 06:18 PM
    How do you think you would do this?

    Post back and someone will look over your answers.
    keyshuna's Avatar
    keyshuna Posts: 6, Reputation: 1
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    #3

    Mar 5, 2006, 06:28 PM
    My answers I got:
    (a) 58,500 units and 58,500 x28 =$1,638,000
    (b) sp=28
    -vc=20
    cm=8 unit
    Fc= 657,875 (14,375+643,500)
    657,875/8=82,234units
    82,234x28=$2,302,552
    (c) can't figure out
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