document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=40729>Question 40729</A>: <I><SPAN STYLE=\"word-break: break-all;\"> . Finance Example – Break Even Analysis.<BR>\n" );
document.write( "The break even point for a business is given by the formula:\r<BR>\n" );
document.write( "\n" );
document.write( " \r<BR>\n" );
document.write( "\n" );
document.write( "where:\r<BR>\n" );
document.write( "\n" );
document.write( "B = units sold to breakeven point<BR>\n" );
document.write( "F = fixed costs<BR>\n" );
document.write( "P = price per unit<BR>\n" );
document.write( "V = variable costs\r<BR>\n" );
document.write( "\n" );
document.write( "a. Suppose EducateComp knows its fixed costs are $100,000, its variable costs are<BR>\n" );
document.write( "$500 per copy of AlgeComp, and they must to sell 15000 copies of AlgeComp to<BR>\n" );
document.write( "break even the first year. What is the minimum price per unit they should charge? </SPAN>\n" );
document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #26170 by </B><A HREF=/tutors/aboutme.mpl?userid=venugopalramana><B>venugopalramana(3286)</B></A><img src=\"/images/stars/stars-13.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=venugopalramana><IMG SRC=http://www.algebra.com/images/aboutme-small.gif BORDER=0 alt=\"About Me\" VALIGN=MIDDLE></A>&nbsp;<IMG SRC=http://www.geocities.com/venugopalramana/FREE_MATHS_ASSISTANCE.html valign=middle><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=26170\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> SEE THE FOLLOWING EXAMPLE<BR>\n" );
document.write( "-----------------------<BR>\n" );
document.write( ":<BR>\n" );
document.write( "Finance Example – Break Even Analysis.<BR>\n" );
document.write( "The break even point for a business is given by the formula:<BR>\n" );
document.write( "where:<BR>\n" );
document.write( "B = units sold to breakeven point=15000<BR>\n" );
document.write( "F = fixed costs=100000<BR>\n" );
document.write( "P = price per unit<BR>\n" );
document.write( "V = variable costs...500/COPY<BR>\n" );
document.write( "a. Suppose EducateComp knows its fixed costs are $100,000, its variable costs are<BR>\n" );
document.write( "$500 per copy of AlgeComp, and they must to sell 15000 copies of AlgeComp to<BR>\n" );
document.write( "break even the first year. What is the minimum price per unit they should charge?<BR>\n" );
document.write( "P*15000=100000+500*15000=7600000<BR>\n" );
document.write( "P=7600000/15000=506.67<BR>\n" );
document.write( "B) Total revenue is given by the formula TR = FC + TVC + Profit, where:<BR>\n" );
document.write( "TR = total revenue=35000*506.67=17733333<BR>\n" );
document.write( "FC = fixed costs<BR>\n" );
document.write( "TVC = total variable costs=35000*500=17500000<BR>\n" );
document.write( "EducateComp’s Sales Department has established a sales goal 35000 units. If<BR>\n" );
document.write( "they achieve their sales goal, what will they profit?<BR>\n" );
document.write( "TR = FC + TVC + Profit<BR>\n" );
document.write( "Profit = TR + FC – TVC=..TAKING THE SALE IS AT BREAKEVEN PRICE<BR>\n" );
document.write( "Profit = (units sold)(price per unit) – fixed costs – (units sold)(variable costs) =17733333-100000-17500000=133333  </SPAN>\n" );
document.write( "</TD></TR></TABLE>\n" );