MAN4504 M3.2 Quiz
At the break-even point: total cost equals total revenue. At the break-even point, total profit (total revenue minus total cost) is zero. total cost equals profit. variable cost equals fixed cost. variable cost equals total revenue. output equals capacity.
total cost equals total revenue. At the break-even point, total profit (total revenue minus total cost) is zero.
The owner of a greenhouse and nursery is considering whether to spend $6,000 to acquire the licensing rights to grow a new variety of rosebush, which she could then sell for $6 each. Per-unit variable cost would be $3. What would the profit be if she were to produce and sell 5,000 rosebushes? $10,000 $15,000 $9,000 Total revenue would be $30,000. Total cost (fixed = $6,000, variable = $15,000) would be $21,000. $0 $30,000
$9,000 Total revenue would be $30,000. Total cost (fixed = $6,000, variable = $15,000) would be $21,000.
The owner of a greenhouse and nursery is considering whether to spend $6,000 to acquire the licensing rights to grow a new variety of rosebush, which she could then sell for $6 each. Per-unit variable cost would be $3. How many rosebushes would she have to produce and sell in order to make a profit of $6,000? 1,000 2,400 3,000 4,000 Add the desired profit of $6,000 to the fixed cost, then divide the sum by the per-unit contribution margin. 1,600
4,000 Add the desired profit of $6,000 to the fixed cost, then divide the sum by the per-unit contribution margin.
What is the break-even quantity for the following situation?FC = $1,200 per weekVC = $2 per unitRev = $6 per unit 200 A volume of 300 units leads to $1,200 in margin to offset fixed costs. 300 1,200 100 600
A volume of 300 units leads to $1,200 in margin to offset fixed costs. 300
Given the following data for a make-or-buy decision: Alternative Fixed Cost Variable Cost Buy $0 per year $8 per unit Make $100,000 per year $4 per unit For what range of output would you prefer to buy? Write your answer in the space provided. Your Answer: I would prefer to buy if Q < 25,000 units.
I would prefer to buy if Q < 25,000 units.
