Break even point. Company sells products for 95,000each. Companies fixed cost is
ID: 2642842 • Letter: B
Question
Break even point. Company sells products for 95,000each. Companies fixed cost is 2.5 million, 50 products are produced and sold each year, profits total $400,000 and firms assets all equity financed are four million. The firms estimates that it can change its production process by adding three million to investment and 360,000 to operating cost.this will reduce variable cost per units by $ 9,000 and increase output by 22 units but the sales price will be lowers to $84,000 to permit sales of additional output. The firm had tax loss carry forwards that render tax rate to zero and equity cost is 12% no debt. What is the incremental profit and profitability? Break even point. Company sells products for 95,000each. Companies fixed cost is 2.5 million, 50 products are produced and sold each year, profits total $400,000 and firms assets all equity financed are four million. The firms estimates that it can change its production process by adding three million to investment and 360,000 to operating cost.this will reduce variable cost per units by $ 9,000 and increase output by 22 units but the sales price will be lowers to $84,000 to permit sales of additional output. The firm had tax loss carry forwards that render tax rate to zero and equity cost is 12% no debt. What is the incremental profit and profitability?Explanation / Answer
Data for Current Production Units Produced 50.00 Sales Price 95,000.00 Total Revenue 4,750,000.00 Profit 400,000.00 Fixed Cost 2,500,000.00 Variable Cost (Sales Revenue - Fixed Cost - Profit 1,850,000.00 Variable Cost per unit (Variable Cost