Respuesta :
Answer:
The break-even point in dollars for the proposal by Vendor A $ 157,142.86
The break-even point in dollars for the proposal by Vendor B =$ 140,000
Explanation:
Weiss Manufacturing
Proposal A Proposal B
The fixed costs $ 55,000 $ 70,000
The variable cost $ 13.00 $ 10.00
The revenue generated
By each unit is $ 20.00 $ 20.00
The break-even point for the proposal by Vendor A= Fixed Costs/Sales Revenue- Variable Costs
Break Even Sales Volume in Dollars= Fixed Costs/ Contribution Margin Ratio
Break Even Sales Volume in Dollars= Fixed Costs/ 1- (variable Costs/ Sales)
The break-even point in dollars for the proposal by Vendor A
= 55,000/1- (13/20)= $ 55000/ 0.35= $ 157,142.86
The break-even point in dollars for the proposal by Vendor B =
= 70,000/ 1- ( 10/20) = 70,000/0.5= $ 140,000
Answer:
BREAK EVEN POINT IN DOLLARS FOR PROPOSAL A = $184,714
BREAK EVEN POINT IN DOLLARS FOR PROPOSAL B = $160,000
Explanation:
Given the following ;
Fixed cost ;
Proposal A = $55,000
Proposal B = $70,000
Variable Cost per unit;
Proposal A = $13
Proposal B = $10
Total Revenue per unit;
Proposal A =$20
Proposal B =$20
Installation cost = $10,000
Calculating theBreak even point in dollars for proposal A and B.
Break even point in dollars is given by;
(Fixed cost ÷ contribution margin)
Contribution margin = (Revenue per unit - variable cost per unit) ÷ revenue per unit
BREAK EVEN POINT IN DOLLARS (PROPOSAL A)
contribution margin = $(20 - 13)÷$20 = 0.35
Total Fixed cost = $55,000+$10,000(installation cost) = $65,000
Fixed cost / contribution margin = $65,000 ÷ 0.35 = $185,714
BREAK EVEN POINT IN DOLLARS (PROPOSAL B)
contribution margin = $(20 - 10)÷$20 = 0.5
Total Fixed cost = $70,000+$10,000(installation cost) = $80,000
Fixed cost / contribution margin = $80,000 ÷ 0.5 = $160,000