Jessica C.

Ong
COA BLK 1E
INSTRUCTION: Using break-even analysis, solve the answers for the questions below.
GIVEN:
Price  =  250
Variable Cost =  100
Total Fixed Cost =   300,000
1. Formulate for the TR, TC, TP functions
A.TR FUNCTION
TR= P x Q
TR= 250 x Q
TR= 250Q
B. TC FUNCTION
TFC+ TVC
TC = TOTAL COST
TFC = TOTAL FIXED COST
TVC = VC x Q
TC= TFC+ VCxQ
TC=300,000+(100xQ)
TC=300,000+100Q
C.TP FUNCTION
TP= TOTAL PROFIT
TP= 250Q-(300,000+100Q)
TP=250Q-300,000-100Q
TP=150Q-300,000

2. What is the break-even quantity?

TR = TC
250Q = 300,000 + 100Q
250Q – 100Q = 300,000
150Q = 300,000
150Q = 300,000
150
Q = 2,000 Break-even Quantity

3. What is the break-even sales?

TR = 250Q
TR = 250(2,000)
TR = 500,000 Break-even Sales

4. Determine profit when the volume of production is equal to 7500.

TP = TR – TC
Q=7,500
TP = 150Q – 300,000
 TP = 150(7500) – 300,000
TP = 825,000

5. Determine the total variable cost at 5,000 units

TVC = TC-TFC
TVC = (300,000+100Q)-300,000
TVC =300,000+100(5,000)-300,000
TVC=300,000+500,000-300,000
TVC=500,000

6. Determine the units to produce to cover-up the total fixed cost.

TFC = TC - TVC
300,000 = 300,000 + 100Q – 500,000
300,000 – 300,000 + 500,000 = 100Q
500,000 = 100Q
100
Q = 5,000 units