Your company is considering altering its operations going forward but is unsure about how this should happen. You We decided to take it upon yourself to complete an operating break even analysis for the company. Use the information in the table to complete the operating break even graph that follows. Operational Information for Wine Co. Selling price per unit $13 Variable cost per unit $3 Fxced operating costs 5600 million Use the graph to determine the sales revenue and operating costs at various levels of production, as well as the operating break even point. Tooltip Mouse over the points in the graph to see their coordinates 1000 Eleven Point of 1000 co Break-even Point -O Operating 8 & REVENUES AND COSTS (ons of collas) 8 Sal Revenues 300 0 30 00 30 UNITS PRODUCED AND SOLD Mom) Assume that the actual sales for the current period equal 68 million units. Considering vour operating break even anal Wine Cabe at this level of sales? O Not enough information given NO Yes To be profitable, a firm has recover its costs. These cats include both its fired and it will costs. One way that a firm was at what would recover the invested costs is to calculate how many units of how much in dollar ses is necessary for the firm to camarot Consider the case of Petrex Oil Petrox Cole considering a project that will have led cost of $10,000,000. The product will be sold for $2.50 per wit und weiteres cost of $12.00 per unit Given Petrow's cost structure, it will have taselt units to break even on this project(Q). Petrox olles marketing sales director doesn't think that the market for the fem's goods la big enough to sell enough units to make the company target operating profit of $20,000,000. In fact, she believes that the firm will be able to sell only about 200,000 units Wow, the words the demand for Petre los product is relatively inelaste, so the firm can increase the sale price. Resuming that the forme con 200,000 units what price must it set to meet the CFO ERIT goal of $20,000,000 $203.50 $162.50 $167.22 O $170.94 What affects the firm's operating break-even point? Several factors afecta firm's operating break-even point. Based on the scenarios described in the following table whether the sectors would increase, decrease or have unchanged a firm break even quantity-asuming that only the listed factor changes and the revant factors remain constant Given Perox's cost structure. It will have to units to break even in the project (Cu). Petrex On Cosmating sales director doesn't think that the market for the firm's goods is big enough to wrough units to make the company target operating profit of $20,000,000. In fact, the believes that there will be able to send about 200.000 units. However, these dengan for Petrox Olla's product is relatively in the firm can increase the price Asuming at the fem200,000 price must it set to meet the CFO'S ERIT goal of $20.000.000 O $200.50 $162.50 O $187.22 5170. what affects the firm's operating bewek-even point Several factors affect a firm perting break even point. Based on the scenario described in the following table, indicate whether these factors wold increase, decrease or leave changed a fimbreak even quantity-assuming that only the Bited factor changes and the relevant factors remain constant Increase Decrease Ne Change O The firm's fixed costs in O The product's sale price increases The amount of debt increases, causing the firm's total interest expense to normas o When fixed costs are high a small decline in sales can lead to dedine in return on guy Petrox Oll Co.'s marketing sales director doesn't think that the market for the firm's goods is big enough to set enough units to make the company target operating profit of $20,000,000. In fact, she believes that the firm will be able to sell only about 200,000 units. However, these thinks the demand for Petrox olCo's product is relatively into the firm can increase the sale price. Assuming that the firm can sel200,000 unts, what price must it set to meet the CFO's EBIT goal of $20,000,000 5303.50 O $162.80 O $187.22 O $170.94 What affects the firm's operating break even point? Several factors affect a firm's operating break even point. Based on the scenarios desobed in the following table, indicate whether these factors would increase, decrease, or leave unchanged a fu're ever Quantitywning that only the listed factor changes and other relevant factors remain constant Increase Decrease No Change O The firm's feed costs increase OOO The product's a price increases 00 The amount of debt increases, causing the firm's total interest expense to increase When the costs are Nigh, a small decline in sales can lead to dedine in return on equly (HO)