Table of Accounts

P = Profit
S = Number of items sold
C = Total cost
Q = Quantity Produced
A. Profit
Profit = $0, If Q =
P = 35Q - (500,000+15Q) = -500,000 + 20Q, If Q > 0
P = 20Q -500,000

Break-Even Point
P = 20Q -500,000
20Q = 500,000
20Q/20 = 500,000/20
Q = 25,000

Unit Revenue
Fixed Cost
Marginal Cost

Break-Even Point

B. Cost
Total Revenue
Profit

C.
Unit Revenue
Fixed Cost
Marginal Cost
* Sales Forecast

* Production Quantity
LOSS

unit revenue
fixed cost
marginal cost
Sales forecast

Production quantity
PROFIT
 unit revenue
fixed cost
marginal cost
Sales forecast

Production quantity
BREAKEVEN
D. Let:
Q = units produced
S = units sold

The constraint that the number produced should not

exceed the number that can be sold can be shown as:

Q <= S
f Accounts
UR = Unit Revenue
V = Variable Cost
F = Fixed cost

P (Q) = UR(Q) - C = P(Q) - V(Q)- F

F / (UR(Q) - V(Q) )

Data
$ 35
$ 500,000
$ 15

25000

C(Q) = V(Q) + F
= UR(Q) < (SF,PQ) * SF = Sales Forecast
P(Q) = 20(Q) - F * PQ = Production Quantity

Data Results
$ 35 Total Revenue $ 700,000
$ 500,000 Total Fixed Cost $ 500,000
$ 15 Total Variable Cost $ 375,000
20000 Profit (Loss) $ (175,000)

25000 Break-Even Point 25000

LOSS

Data Results
$ 35 Total Revenue $ 1,050,000.00
$ 500,000 Total Fixed Cost $ 500,000.00
$ 15 Total Variable cost $ 450,000.00
Profit ( LOSS) $ 100,000.00

30,000 Breakeven Point 25,000

PROFIT
Data Results
$ 35 Total Revenue $ 875,000
$ 500,000 Total Fixed Cost $ 500,000
$ 15 Total Variable cost $ 375,000
Profit ( LOSS) -

25,000 Breakeven Point 25,000

BREAKEVEN