Question 1189744: A fabrication company engaged in production with a capacity of 150, 000 pieces per year. But, it is just operating at 70% of its full capacity. The company has an annual income of 250, 000, annual fixed cost are 50, 000 and variable costs are 1.00 pesos per unit. How many productions of parts must be produced for break-even point?
Answer by ankor@dixie-net.com(22740)   (Show Source):
You can put this solution on YOUR website! A fabrication company engaged in production with a capacity of 150,000 pieces per year.
But, it is just operating at 70% of its full capacity.
The company has an annual income of 250,000, annual fixed cost are 50,000 and variable costs are 1.00 pesos per unit.
How many productions of parts must be produced for break-even point?
:
Find how many units are produced at 70% capacity
.7*150000 = 105000 units
find the retail cost per unit with a revenue of $250000
250000/105000 = $2.38 the selling price per unit
:
" How many productions of parts must be produced for break-even point?"
let n = no. units require to accomplish this
Revenue = cost
2.38n = 1n + 50000
2.38n - n = 50000
1.38n = 50000
n = 50000/1.38
n = 36232 units needed to be sold to break even
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