GG EDU Inc., expects a product to have a profitable life of between 1 and 5 years.
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Question:
GG EDU Inc., expects a product to have a profitable life of between 1 and 5 years. He wants to know the breakeven number of units that must be sold annually to realize payback within each of the time periods of 1 year, 2 years, and so on up to 5 years. Find the breakeven number of units for each year up to 5 years with the cost and revenue estimates are as follows:
Fixed costs FC = initial investment of $ 80,000 with $ 1000 annual operating cost. Variable cost per unit v = $ 8
Revenue per unit r = Twice the variable cost for the first 5 years and 50% of the variable cost thereafter.
Related Book For
Financial and Managerial Accounting the basis for business decisions
ISBN: 978-1259692406
18th edition
Authors: Jan Williams, Susan Haka, Mark Bettner, Joseph Carcello
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