Here is a break-even analysis model.
Break-even Analysis | |
| |
Revenue | |
Selling Price per unit | $20 |
| |
Costs | |
Fixed Costs per unit | $210,000 |
Variable Cost per unit | $8 |
| |
Break-even Point | |
Quantity (Q) | 17,500.00 |
Do the following two tasks.
a. | Create a strategy table showing how the quantity changes as theselling price varies from $18 to $22. | |
b. | Create a strategy table showing how the quantity changes as theselling price varies from $18 to $22 and the variable cost per unitchanges from $6 to $10. | |
Recall that the Break-even point is when Profit equal zero, orRevenue minus Total Cost equals zero.
Here is the Break-even formula:
