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    Worksheet About Breakeven Analysis

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    Anuka Yitu
    1. The document provides information and calculations for breakeven analysis of different companies. It includes a fertilizer producer calculating breakeven sales, a manufacturing company analyzing whether to purchase new equipment, and a printer company calculating breakeven sales and profits based on different printer models. 2. It also includes a question calculating the fixed costs of machine B based on breakeven point information for machine A and total costs for machine B's production.

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    Worksheet About Breakeven Analysis

    Uploaded by

    Anuka Yitu
    98 views2 pages
    1. The document provides information and calculations for breakeven analysis of different companies. It includes a fertilizer producer calculating breakeven sales, a manufacturing company analyzing whether to purchase new equipment, and a printer company calculating breakeven sales and profits based on different printer models. 2. It also includes a question calculating the fixed costs of machine B based on breakeven point information for machine A and total costs for machine B's production.

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    Break Even Example

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    1. The document provides information and calculations for breakeven analysis of different companies. It includes a fertilizer producer calculating breakeven sales, a manufacturing company analyzing whether to purchase new equipment, and a printer company calculating breakeven sales and profits based on different printer models. 2. It also includes a question calculating the fixed costs of machine B based on breakeven point information for machine A and total costs for machine B's production.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    98 views2 pages

    Worksheet About Breakeven Analysis

    Uploaded by

    Anuka Yitu
    1. The document provides information and calculations for breakeven analysis of different companies. It includes a fertilizer producer calculating breakeven sales, a manufacturing company analyzing whether to purchase new equipment, and a printer company calculating breakeven sales and profits based on different printer models. 2. It also includes a question calculating the fixed costs of machine B based on breakeven point information for machine A and total costs for machine B's production.

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    © All Rights Reserved
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    Worksheet about breakeven analysis

    1. A local fertilizer producer utilizes compost waste to develop an organic fertilizer product. The
    fertilizer is prepared for retail sale in 100 quintals. The retail sales price is birr 200 per quintal. The
    average variable cost per quintal is birr 150 and average annual fixed costs are birr 100,000.
    Depending on this assumption:
    i. calculate the number of quintals that must be sold in order to break even as well as the total birr
    of sales needed to break-even
    ii. calculate the profit
    iii. Develop the breakeven chart depending on ‘i’
    2. An XYZ manufacturing company manufactured a brand item that has a variable cost of birr 75 per
    unit and a selling price of birr 125 per unit. Fixed costs are birr 1,200,000. Current volume is
    5,000,000 units. The company can substantially improve the product quality by adding a new piece of
    equipment at an additional fixed cost of birr 500,000. Variable cost would increase to birr 100, but
    their volume should increase to 7,000,000 units due to the higher quality product.
    i. Should the company buy the new equipment?
    ii. What are the break-even points (birr and units) for the two processes?
    iii. Develop a break-even chart.
    3. International Printer Machines (IPM) builds three computer printer models: Inkjet, Laser, and Color
    Laser. Information for these three products is as follows:

    Color
    Inkjet Laser Total
    Laser
    Selling price per unit $250 $400 $1,600
    Variable cost per unit $100 $150 $   800
    Expected unit sales
    12,000 6,000 2,000 20,000
    (annual)
    60 30 100
    Sales mix 10 percent
    percent percent percent

    Total annual fixed costs are $5,000,000. Assume the sales mix remains the same at all levels
    of sales.
    A. How many printers in total must be sold to break even?
    B. How many units of each printer must be sold to break even?
    C. How many printers in total must be sold to earn an annual profit of $1,000,000?
    D. How many units of each printer must be sold to earn an annual profit of $1,000,000?
    4. Machine A has a fixed cost of $40000 per year and a variable cost of $60 per unit. Machine
    B has an unknown fixed cost, but with this process 200 units can be produced each month at
    Worksheet about breakeven analysis

    a total variable cost of $2000. If the total costs of the two machines break even at a
    production rate of 2000 units per year, what is the fixed cost of machine B?

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