kofigc
Nov 3, 2010, 05:31 AM
I know the guidelines state that we should post our working along with questions to enable people to direct us toward the correct solution but, I am more or less clueless with how I should take on this question. I will do my best to post anything of meaning or worth after the question, as usual any help is greatly appreciated with this. :)
Question
A firm's annual fixed cost of production is £7200. The annual variable costs of production are £60 per unit of output plis £2 per square unit of output. The product is sold at a constant price of £320 per unit. Calcualte the breakeven levels of production.
Ideas:
Breakeven occurs when Revenue = Costs.
Revenue = Selling Price * Items Sold so R(x) = 320 * x
Costs = Fixed set up costs + Variable costs * Items produced so C(x) = 7200+60+2 * x
B.E. = 320x - 7262x
I am not sure if this is the right direction to be going in or not and therefore can't / don't know how to progress any further.
Question
A firm's annual fixed cost of production is £7200. The annual variable costs of production are £60 per unit of output plis £2 per square unit of output. The product is sold at a constant price of £320 per unit. Calcualte the breakeven levels of production.
Ideas:
Breakeven occurs when Revenue = Costs.
Revenue = Selling Price * Items Sold so R(x) = 320 * x
Costs = Fixed set up costs + Variable costs * Items produced so C(x) = 7200+60+2 * x
B.E. = 320x - 7262x
I am not sure if this is the right direction to be going in or not and therefore can't / don't know how to progress any further.