Will the break-even point go up or down

Assignment Help Finance Basics

Reference no: EM131787276

Question: Jay Linoleum Company has fixed costs of $70,000. Its product currently sells for $4 per unit and has variable costs per unit of $2.60. Mr. Thomas, the head of manufacturing, proposes to buy new equipment that will cost $300,000 and drive up fixed costs to $105,000. Although the price will remain at $4 per unit, the increased automation will reduce variable costs per unit to $2.25. As a result of Thomas's suggestion, will the break-even point go up or down? Compute the necessary numbers.

Reference no: EM131787276

Questions Cloud

Compute the break-even point of eaton tool company : Eaton Tool Company has fixed costs of $200,000, sells its units for $56, and has variable costs of $31 per unit. Compute the break-even point.

What are the delta and gamma of an option : If the implied price volatility of a call option on a Treasury bond futures contract is 10.0 and the duration of the CTD issue is 8, what is the implied yield

Contractor hires andrew attorney to negotiate contract : Carl Contractor hires Andrew attorney to negotiate a contract on his behalf. Andrew is both an independent contractor and an agent acting on behalf of carl.

Prefer an option with a high theta : Explain why the writer of an option would prefer an option with a high theta (all other factors equal).

Will the break-even point go up or down : Jay Linoleum Company has fixed costs of $70,000. Its product currently sells for $4 per unit and has variable costs per unit of $2.60. Mr. Thomas.

What you write here should help you locate the article again : Locate ONE article or book from APUS library. This is how I found my article. What you write here should help you locate the article again when/if you need to.

Report the bin width and describe this histogram : Explain why the distribution of ideal weights is likely to be bimodal if men and women are both included in the sample.

How many units does the firm need to sell : Calloway Cab Company determines its break-even point strictly on the basis of cash expenditures related to fixed costs. Its total fixed costs are $400,000.

Prepare a correct trial balance : A $1,251 cash drawing by the owner was debited to M. Sterling, Capital for $1,251 and credited to Cash for $1,251. Prepare a correct trial balance

User Account

All Pages