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75552/assignments/16164447esubmit The 1> Assignments> In Class Discussion - Assignment 5 In Class Discussion - Assignment 5 a text entry box or a file upload Due Monday by 11:59pm Points 18 Submitting Available Jul 27 at 12am-Jul 30 at 11:59pm 4 days Unit Cost- Variable Cost+ (fixed Cost/ Units sold) Markup Price Unit Cost/ (1- Desired Return on Sales) Break-Even Volume Fixed Cost /(Price- Variable Cost) If a toaster manufacturer has the following costs and expected units of sales: Variable Cost-$10. Fixed Cost- $300,000. Expected Units of Sales 50,000 Units If the manufacturer wants a 20% return on their sales, what should be their break even volume? File Upload Text Entry Google Doc Upload a file, or choose a file you've already uploaded sure File Browse... over + Add Another File Cick here to find a file you've already uploaded Cancel Submit AssignmentExplanation / Answer
To find the break even volume if the manufacturer want a 20% return on their sales , the given inormations are:
Variable cost =$10
Fixed Cost =$300000
Unit of sales=50000
Desired return on sales = 20% which is equal to 20/100
to find break even volume, the formula is =Fixed cost/(Price-VC)
Now in the question we have both Fixed cost and Variable cost but we don't have Price. So, first we have to find the price .
The formula of price is = Unit cost /(1-desired sales of return on sales)
But we don't have the unit cost to find the mark up price, So first we have to find out the Unit Cost.
Unit Cost = VC + FC/units sold.
from our question i.e
Unit cost = 10+300000/50000
= 10+6
= 16
now, Markup Price = Unit Cost/(1-desired return on sales)
= 16/(1-20%)
=16/(1-20/100)
= 20
Break even volume = Fixed Cost/(Price-VC)
= 300000/20-10
= 300000/10
= 30000.
This is the answer.
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