Question: FC = $9,200/month v = $ .70/unit R = $ .90/unit Q BEP = FC R - v = $9,200 $.90 - $.70 = 46,000

FC = $9,200/month v = $ .70/unit

R = $ .90/unit

  1. Q

BEP

= FC

R - v

= $9,200

$.90 - $.70

= 46,000 units

  1. Profit = R x Q (FC + v x Q)

1. P61,000 = $.90(61,000) - [$9,200 + $.70(61,000)] = $3,000

2. P87,000 = $.90(87,000) - [$9,200 + $.70(87,000)] = $8,200

  1. Q = Specified profit + FC

R - v

= $16,000 + 9,200

$.90 / unit - $.70 / unit

= 126,000 units

  1. Total Revenue = R x Q, so Q =

Total Revenue =

R

$23,000

$.90 / unit

= 25,555.56 units

e.

Plot the total cost and total revenue lines.

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