Problem # 1:: Answer: Break-Even in Units 30,000 Panels
Problem # 1:: Answer: Break-Even in Units 30,000 Panels
Problem # 1:: Answer: Break-Even in Units 30,000 Panels
Assume that as an investor, you are planning to enter the construction industry as a panel formwork supplier. The potential
number of forthcoming projects, you forecasted that within two years, your fixed cost for producing formworks is Rs. 300,000.
The variable unit cost for making one panel is Rs. 15. The sale price for each panel will be Rs. 25. If you charge Rs. 25 for each
panel, how many panels you need to sell in total, in order to start making money?
Solution:
Problem # 2:
Suppose you intend to open a franchise business to supply a nationally-known line of women’s shoes. You’ve found a good
location in Abbottabad to open your shop, and have determined that the average prices and costs of operating the store are:
Solution:
A manufacturing company supplies its products to construction job sites. The average monthly fixed cost per site is Rs. 4,500,
while each unit cost Rs. 35 to produce and selling price is Rs. 50 per unit. Determine the monthly breakeven volume.
Solution:
Problem # 4:
A store sells t-shirts. The average selling price is Rs. 15 and the average variable cost (cost price) is Rs. 9. Thus, every time the
store sells a shirt it has Rs. 6 remaining after it pays the manufacturer. This Rs. 6 is referred to as the unit contribution.
(a) Suppose the fixed costs of operating the store (its operating expenses) are Rs. 100,000 per year. Find Break-even in units?
Solution:
(b) If the owner desired a profit of Rs. 25,000, what will be break-even point in Rupees?
Solution:
(c) If fixed costs rose to Rs. 110,000, break-even in unit’s volume would be?
Solution:
(d) If the average selling price rose to Rs.16, break even volume would fall? Solution: