Break-Even Analysis Answers

I.

The following graph represents the cost and revenue functions for custom-made computers. How many computers have been sold at the break-even point?

Salesperson

Calvin works at a facility which processes apples. It costs the facility $0.68 to make either a jar of applesauce or a bottle of apple juice. Due to the nature of the process and contractual agreements, Calvin’s facility must make and sell three jars of applesauce for every two bottles of apple juice. A jar of applesauce sells for $2.20, and a bottle of apple juice sells for $3.15. If the facility has annual overhead costs of $368,500, not including production costs, how many bottles of apple juice will the facility have sold when it breaks even every year? Round to the nearest whole bottle, if necessary.

Which of the following expenses is not a fixed cost?

Salesperson

The following graph shows the relationship between cost and revenue for a manufacturer of radios. Which of the following pairs of equations best suits this graph? Cost I Cost II Revenue III Revenue IV

Bloro Appliances is pushing a new model of dishwasher. It costs Bloro $71.22 to put each dishwasher on the sales floor, but they can sell the dishwashers for $285.50 apiece. Bloro has three primary salespeople, each of whom earns a different commission per dishwasher sold. Their sales data for the past six months is shown below.SalespersonSoldCommission/SaleRick114$47.50Carl176$62.75Lee96$51.35In order to stock the dishwashers, Bloro Appliances had to sign a contract which included costs of $15,975. How much profit did Bloro Appliances gain from sales of these dishwashers over the past six months?

A chicken farmer can produce one crate of eggs at a cost of $9.86, and can sell that crate for $34.24. If the farmer has a starting overhead cost of $7,312, not including production costs, how many crates must be sold in order to realize a profit of $11,300, to the nearest crate?

Marcy’s company produces grandfather clocks. Each clock costs them $164 to make, and they can sell a clock for $625. If their annual overhead costs, not counting the cost to produce the clocks, comes to $96,000, how many clocks must Marcy’s company sell each year to break even? Round to the nearest whole clock, if necessary.