What is the break-even point in terms of number of finished good units for purchasing another...
What is the break-even point in terms of number of finished good units for purchasing another machine at Station #3 if the projected selling price is $224 per finished good unit? For variable cost, use only the raw material cost and no interest or other costs.
Additional info:
Machine price: $142,500
Inventory: Delivered every 4 days, $50 per unit, $1000 per order
Homework Answers
Given that, Seling price = SP = $224 per unit
Fixed cost = $142,500
Variable cost per unit = $50 per unit
Let the Breakeven quantity = P
In the condition of Breakeven,
Total Revenue = Total cost
Selling price per unit x Quantity = Fixed cost + (Variable cost per unit x Quantity)
224P = 142500 + 50P
174P = 142500
P = Breakeven Quanity = 818.96 Units or 819 Units (Approx.)
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