Production & Operations Management (Chapter 2)

FORMULA FC = FIXED COST SP = SELLING PRICE = VARIABLE COST P = PROFIT BEP(UNITS) Q = FC / (SP - VC) BEP ($) = Q X SP V Cf PROFIT = Q (SP - VC) - FC p - Cv TOTAL COST = FC + VC + Q CONTRIBUTION MARGIN = SP - VC REQUIRE Q, NEED TO GENERATE PROFIT Q =P +FC / (SP - VC) 1. Haji Ahmad is an owner of Pizza Kayu Api Enterprise. He plans to increase his pizza production by built a new stove that cost of $12.000. The raw material would be $1.20 and labor costs are $2.80. and each pizza would be selling at $9. (a) How many pizzas must be sold in order to break even? (b) How much the pizzas in dollars? (c) What would the profit or loss be if 2.000 pizzas are made and sold out. (d) How many pizzas must be sold to realize a profit of $4.000? (e) If 2.000 pizzas can be sold, and a profit target is $5.000. what price should be charged per pizza