Answer to Question #110958 in Accounting for vipha

Question #110958
If the unit variable cost for each computer is $350 and the manufacturer has fixed costs totaling $2 million, how many computers must this manufacturer sell to break even? How many must it sell to realize a profit of $50 million?
1
Expert's answer
2020-04-21T11:07:48-0400

1) If the unit variable cost for each computer is $350 and the manufacturer has fixed costs totaling $2 million, how many computers must this manufacturer sell to break even?

Breakeven= Total Fixed Cost / Contribution

Contribution = Selling price - Variable cost 

Breakeven =$2,000,000 / ($800 -$ 350)

Breakeven = 4444.44 Units or 4445 Units


2) How many must it sell to realize a profit of $50 million?

Unit volume = (Fixed cost + Profit goal) / (Selling price - Variable cost)

Unit Volume = ($2,000,000 + $50,000,000 )/ ($800 - $350)

Unit Volume = 115555.5 Units or 115556 Units



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Comments

Assignment Expert
24.08.20, 22:17

Dear visitor, please use panel for submitting new questions

A consumer purchases a computer for $800 from a retailer. If the retailer’s markup is 30 percent and the wholesaler’s markup is 10 percent, both based on their respective selling prices, at what price does the manufacturer sell the product to the wholesal
24.08.20, 19:06

This is my assignment question. Submission last date is 24 August 2020, (11:55 PM). Can you help me please.

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