|
Question 1021614: Please help solve this question (detailed workings very much appreciated!) Thank you.
BigGear motor company sells its scooters at $500 per unit. The company’s manufacturing cost for one scooter is $20. The fixed cost per month for the company is $19,200.
1) Give two examples of fixed costs
2) Define the break even level
3) Find the break even quantity
4) The owner of the company wants to make a profit of at least $20,000 in the month of June. How many scooters must the company sell to achieve this target?
Answer by stanbon(75887)   (Show Source):
You can put this solution on YOUR website! Please help solve this question (detailed workings very much appreciated!) Thank you.
BigGear motor company sells its scooters at $500 per unit. The company’s manufacturing cost for one scooter is $20. The fixed cost per month for the company is $19,200.
1) Give two examples of fixed costs:: 19,200 per month ; $20 per scooter
-------------------------------
2) Define the break even level:: When Revenue (500x) = Cost(19200+20x)
Solve: 500x = 19200 + 20x
480x = 19200
x = 40 (when they make and sell 40 scooters in a month)
-----------------------------
3) Find the break even quantity:: (when they make and sell 40 scooters in a month)
=======================
4) The owner of the company wants to make a profit of at least $20,000 in the month of June. How many scooters must the company sell to achieve this target?
Revenue - Cost = 20,000
500x - (19200+20x) = 20000
480x = 39200
x = 82 scooters sold (when rounded up)
------------
Cheers,
Stan H.
-------------
|
|
|
| |
