BREAKEVEN EXERCISES:

1. The fixed costs at Company X are $1 million annually. The main product
has revenue of $8.90 per unit and $4.50 variable cost.

a) Determine the breakeven quantity per year.

b) What would be the annual profit if 200000 units are sold.

2. A product currently sells for $12 per unit. The variable costs are $4 per unit,
and 10,000 units are sold annually and a profit of $30,000 is realized per
year. A new design will increase the variable costs by %20 and Fixed Costs
by %10 but sales will increase to 12,000 units per year.

a) At what selling price do we breakeven?

b) If the selling price is to be kept same ($12/unit) what will the annual profit
be?

3. A defense contractor has been able to summarize its total annual fixed
costs as $100,000 and the total variable cost per unit of production as $33.

a) If only 5000 units is all that is expected to sell to the government this year
what should the per unit selling price be to make a %25 profit this year?
b) If foreign sales of 3000 units per year is to be added to the 5000 units
government contract above and a %25 profit is acceptable for this
contractor again, what could be the new selling price per unit?

4. A student sets up a T-shirt shop. You buy a machine that’s necessary for
the manufacture of T-shirts for € 600. The company charges you € 5.5 for
each shirt you buy. Printing de design in each shirt costs 50 cents.The
council's license to sell T-shirts is € 120.

a) If you decide to sell the shirts for € 10 and you sell 2.000 shirts, what
would be total profit?
b) If you estimated that you can sell 1,000 shirts at a price of € 15, what will
be your result?
c) What would be the breakeven for a price of sale of 15 euros.
5. A car cleaning company has fixed daily costs of € 372 and variable costs
of € 7 per hour of work. The price charged for each service is € 90 and
dedicates an average time of 4 hours to each of them.

a) How many daily customers must you serve to reach the breakeven?
b) How many daily customers must you attend to earn € 248?

6. A company that manufactures tables works with fixed costs of € 100,000

and variable unit costs of € 50 per table produced. The profit for a production
of a thousand tables is € 50,000.
a) Calculate the sale price of each table.
b) Calculate the break-even.

7. A plumbing company has fixed daily costs of 223 euros and variable costs
of 4.2 euros per hour of work. If the price charged for each service amounts
to 54 euros and dedicates an average time of 4 hours to each of them.

a) How many daily customers must the company serve to reach the
breakeven?
b) And to earn 150 euros a day?

8. A band wants to give a concert in Baluarte. Baluarte charges them € 450

for renting the room and € 3 per person entering the premises. On the other
hand, they decide to make some posters and brochures to announce the
event. The graphic design company charges them € 150 for the photoliths,
regardless of the number of posters and brochures they order; In addition, he
will charge € 50 for a 50 poster order and € 60 for a brochure order. The
students are sure of being able to sell the 1,000 tickets that represent the
maximum capacity of the room .

a) If they sell 1,000 tickets, what would be the results?

b) If the ticket price was € 4 and 700 tickets were sold, what would be the
results?

c) If the ticket price is € 10, what would be the breakeven?