Case Study 6-32

Exercise 6-7 Compute the Break-Even Point 1.The equality linguistic rule yields the break-even localise in unit sales, Q, as follows: | |Profit |= Unit CM × Q ? better expenses | | |$0 |= ($15 ? $12) × Q ? $4,200 | | |$0 |= ($3) × Q ? $4,200 | | |$3Q |= $4,200 | | |Q |= $4,200 ÷ $3 | | |Q |= 1,400 baskets | 2.The equation rule can be used to compute the break-even insinuate in sales dollar marks as follows: [pic] | |Profit |= CM symmetry × gross receipts ? Fixed expenses | | |$0 |= 0.20 × gross revenue ? $4,200 | | |0.

20 × Sales |= $4,200 ! | | |Sales |= $4,200 ÷ 0.20 | | |Sales |= $21,000 | 3.The formula rule gives an firmness of purpose that is identical to the equation method for the break-even point in unit sales: [pic] 4.The formula method also gives an answer that is identical to the equation method for the break-even point in dollar sales: [pic] Exercise 6-15 Operating Leverage |1. | |...If you involve to sign up a full essay, order it on our website: OrderEssay.net

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