The Willow Furniture Company produces tables. The fixed monthly cost of production is $8,000, and the variable cost per table is $65. The tables sell for $180 apiece.
For a monthly volume of 300 tables, determine the total cost, total revenue, and profit.
Exercise1
The Willow Furniture Company produces tables. The fixed monthly cost of production is $8,000, and the variable cost per table is $65. The tables sell for $180 apiece.
For a monthly volume of 300 tables, determine the total cost, total revenue, and profit.
Answer:
Fixed cost (cf) = $8,000
Total variable cost (vcv ) = (300)*(65) = $19,500
Total cost = $8,000 + $19,500 = $27,500
Total revenue (vp) = (300)*(180) = $54,000
Profit = $54,000 - $27,500 = $26,500
Exercise1
b. Determine the monthly break-even volume for the Willow Furniture Company.
Exercise1
b. Determine the monthly break-even volume for the Willow Furniture Company.
Answer:
To break even
The company needs to produce almost 70 tables per month to break even
Exercise2
Evergreen Fertilizer Company produces fertilizer. The company's fixed monthly cost is $25,000, and its variable cost per pound of fertilizer is $0.15. Evergreen sells the fertilizer for $0.40 per pound. Determine the monthly break-even volume for the company.
Exercise2
Evergreen Fertilizer Company produces fertilizer. The company's fixed monthly cost is $25,000, and its variable cost per pound of fertilizer is $0.15. Evergreen sells the fertilizer for $0.40 per pound. Determine the monthly break-even volume for the company.
Evergreen must produce 100,000 lb per month to break even
Exercise3
Graphically illustrate the break-even volume for the Evergreen Fertilizer Company determined in Exercise2
