You have just become product manager for a line of specialty widgets. Your Fixed Costs (FC) for running your?

You have just become product manager for a line of specialty widgets. Your Fixed Costs (FC) for running your plant are $250,000 a month. This includes salaries, insurance, rent, amortized capitalization of equipment, etc.


Your Variable Costs (VC) per unit will, of course, vary. You have looked at your hourly salaries, your utilities usage, your raw materials used to make your widget, shipping, promotional programs, and other variable costs. These Variable Costs (VC) average $138,000 per month.


You production run of widgets averages 10,000 widgets in any given 30-day month.


Your selling price for the widget is $79.95 and you sell direct via the Internet.


What is your Unit FC per widget? Your Unit VC per widget? Unit Cost (UC) per widget? What is your breakeven (BE) point?

You have just become product manager for a line of specialty widgets. Your Fixed Costs (FC) for running your?
To get FC per Widget, just divide FC by # of widgets


$250,000/10,000 = $25


VC is the same


$138,000/10,000 = $13.8


Unit cost is $25 + $13.80 (FC + VC) = $38.80


BE is $79.95w=$388,000


folve for w (# of widgets)


w = 4853.03 so BE is 4854 widgets sold
Reply:Let say n is the no of widgets


To get FC per Widget,


250,000/10,000 = 25


VC is the same same as above


$138,000/10,000 = $13.8


Therefore the Unit cost would be


25 + 13.80 (FC + VC) = 38.80


Break Even would be at 79.95n=388,000


solving for n


n = 4853 widgets sold


email if it wrong at buntales_27@yahoo.com
Reply:Unit FC would be just $250,000/10,000





VC per widget would be $138,000/10,000





Unit Cost per widget would be: ($250,000+$138,000)/10,000





Break even point would be: $250,000 [divided by] ($79.95 [minus] Answer to VC per widget)
Reply:Next time consider shortening your question down (instead of just copying your homework onto the computer and pressing send). DO YOUR OWN HOMEWORK!





$25 per widget on FC


$13.8 per widghet on VC


(these are obvious, take the total cost and divide them by the number of widgets)


um, unit cost? what? is that just 25 + 13.8 = 38.8?


Breakeven point = when you sell a certain number of widgets , say 'n', when you made as much as you spent. (n is your answer)





38.8*10,000 = 79.95n. Solve for n.
Reply:Unit FC per widget = $250,000 / 10,000 or $25.00


Unit VC per widget = $138,000 / 10,000 or $13.80





Answer: Break even point (BE) in volume of sales:


BE = FC / (unit selling price - unit VC)


BE = $250,000 / ($79.95 - $13.80)


BE = $250,000 / $66.15


BE = 3779 %26amp; 383/1323 widgets





Proof:


Sales = 3779 %26amp; 383/1323 * $79.95 or $302,154.20


VC = 3779 %26amp; 383/1323 * $13.80 or $52,154.20


FC is fixed at $250,000.00


Sales - Variable Cost - Fixed Cost = Net profit (loss)


$302,154.20 - $52,154.20 - $250,000 = $0.00


Break-even point is a point in sales wherein there is no profit realized nor loss incurred.
Reply:FC per widget is 250000/10000=25 dollars per widget





VC per widget is 138000/10000=13.80 dollars per widget





UC per widget is (250000+138000)/10000=38.80 dollars per widget





THe break even point is the point where cost=revenue or profit=0. This problem is poorly posed to determine breakeven point. Do you need a production level? If so, then solve 79.95x=388000 to find that you need to produce 4853 widgets to break even. Do you need a price instead? Then solve P*10000=388000 to find that you need to sell your 10000 widgets at 38.80 in order to break even.