463 WordsAug 17, 20142 Pages

#2 a. Cost = 9*12000 + 60000 = 168000
Revenue = 12000 * 25 = 300000
Profit = 300000 - 168000 = 132000
b. 25 charge to recap - 9 variable cost = 16
60000 operation fee / 16 = 3750 break volume of tires
4 .40 per pound - .15 cost = .25
25,000 operational cost / .25 = 100,000 units to break even
12 .60 new cost - .15 = .35
25,000 / .35 = 55, 555.56
Break Even margin will decrease going from 100,000 to 55,555.56
Had to do Ref 13 in order to do number 14
.40 - .22 = .18 new cost
25,000 / .18 = 138,888.89
Break Even volume for #13 = 138,888.89
14. An additional 14,000 for advertising will increase the annual operating cost to: 25,000 + 14,000 = 39,000
The new operating volume will be: 39,000 / .18 = 216,667.67
Answer: operation volume will INCREASE from 138,888 to 216,667
20. 2000 hotdogs * 7 games = 14,000 hotdogs
14000 hotdogs * .35 cost of each hotdog = 4900 cost for all the hotdogs
Fees = 3000 for vendor + 4500 for equipment = 7500
Total cost will be 7500 + 4900 = 12,400
You will sell 14000 hotdogs in the seven games. Therefore to break even you must sell each hotdog for: 12,400 / 14000 = .88 cents. You have to sell each hotdog for 88 cents to break even.
b. Some examples are: Cost of equipment may go up. The number of hotdogs sold can increase (good) or decrease (bad). The number of attendees can decrease due to weather therefore a smaller number of people to buy hotdogs.
22. 350,000 = total cost
18,000 = tuition
12,000 fee for first 100 students
a. 350,000 / (18000 tuition - 1200 fee) = 59 students have to enroll to break even
b. (18000 tuition - 12000 fee for first 100 students) = 6000
75 students * 6000 = 450,000
450,000 - 350,000 = 100,000 profit for 75 students
c. If tuition increases to 24000 then the profit per student for the 35 students is:
24000 -

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