Break Even Analysis

374 WordsFeb 2, 20142 Pages
6a. Cost $150,000,000.00 Life $25.00 Straight-Line Depreciation $6,000,000.00 Total Cost=Fixed Cost + Variable Cost (volume) Fixed Cost $4,000,000.00 $10,000,000.00 Variable Cost (volume) $1.25(10,000,000) 12,500,000 Total Cost $22,500,000.00 Revenue=P (volume) Price Per Unit $3.25 Volume 10,000,000 Revenue $32,500,000.00 Revenue $32,500,000.00 Total Cost $22,500,000.00 Annual Profits $10,000,000.00 6b. Cost $150,000,000.00 Life $25.00 Straight-Line Depreciation $6,000,000.00 Total Cost=Fixed Cost + Variable Cost (volume) Fixed Cost $4,000,000.00 $10,000,000.00 Variable Cost (volume) 1.25(2500000) 3,125,000 Total Cost $13,125,000.00 Revenue=P (volume) Price Per Unit $3.25 Volume 2,500,000 Revenue $8,125,000.00 Revenue $8,125,000.00 Total Cost $13,125,000.00 Annual Profits $(5,000,000.00) 6c. Cost $150,000,000.00 Life $25.00 Straight-Line Depreciation $6,000,000.00 Total Cost=Fixed Cost + Variable Cost (volume) Fixed Cost $4,000,000.00 $10,000,000.00 Variable Cost (volume) 1.25(5000000) 6,250,000 Total Cost $16,250,000.00 Revenue=P (volume) Price Per Unit $3.25

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