Question

G H 1 Problem 30 Problem 30 p. 18 - Setup and complete the problem using the input data provide in the problem description. Answer the questions, (a) How many units should be sold to breakeven for each proposal? 3 Known parameters: Proposal A Proposal B 4 Selling price per unit 5 Fixed cost 6 Variable cost per unit 8 Input Data 9 Number of units, N (b) If the expected volume is 8,300 units, which alternative should be chosen? Why? 11 Results 12 Total revenue 13 Fixed cost 14 Total variable cost 15 Total cost 16 Profit 17 ВЕР 18 BEPS

Answer 1

	Proposal A	Proposal B
Selling price per unit	18	18
Fixed cost	65000	34000
Variable cost per unit	10	14
Number of units	8300	8300
Total Revenues	149400	149400
Fixed cost	65000	34000
Total variable cost	83000	116200
Total cost	148000	150200
Profit	1400	-800
BEP	8125	8500
BEP$	146250	153000
Alternative A should be chosen since higher profit and lower BEP

- A WN Proposal A 18 65000 10 Proposal B 18 34000 14 8300 8300 4 Selling price per unit 5 Fixed cost 6 Variable cost per unit 7 8 9 Number of units 10 11 12 Total Revenues 13 Fixed cost 14 Total variable cost 15 Total cost 16 Profit | 17 | BEP | 18 BEPS 19 Alternative A should be chosen since higher profit and lower BEP =B4*B9 =C4*C9 =B5 =C5 =B9*B6 =C9* C6 =B13+B14 =C13+C14 =B12-B15 =C12-C15 =B5/(B4-B6) =C5/(C4-C6) =B17*B4 =C17*C4