Computer Company's Break Even Point: 30000 Computers

  • Context: MHB 
  • Thread starter Thread starter Suraphel
  • Start date Start date
  • Tags Tags
    Break even Point
Click For Summary
SUMMARY

The computer company plans to produce 30,000 computers at a selling price of $700 each. With fixed costs of $5,000,000 and total variable costs of $6,000,000, the break-even point occurs when total revenue equals total costs. The break-even point can be calculated using the formula: Revenue = Fixed Costs + Variable Costs, leading to a break-even revenue of $11,000,000. Therefore, the company must sell 15,714 computers to break even.

PREREQUISITES
  • Understanding of break-even analysis
  • Familiarity with fixed and variable costs
  • Basic knowledge of revenue calculations
  • Ability to perform simple algebraic equations
NEXT STEPS
  • Study break-even analysis techniques in financial modeling
  • Learn about cost-volume-profit (CVP) analysis
  • Explore pricing strategies for maximizing revenue
  • Investigate methods for reducing fixed and variable costs
USEFUL FOR

Entrepreneurs, financial analysts, business students, and anyone involved in cost management and pricing strategies in manufacturing.

Suraphel
Messages
4
Reaction score
0
Dear All,
Please help me.
A computer company plans to produce 30000 computer next year. They will sell for \$700 each. The fixed cost of operation care \$5000000 total variable cost are \$6000000. What is the break even point?
 
Last edited by a moderator:
Mathematics news on Phys.org
at the break even point, revenue - (fixed cost + variable cost) = 0

You are given both fixed and total variable costs ... revenue is number of computers sold time \$700
 
skeeter said:
at the break even point, revenue - (fixed cost + variable cost) = 0

You are given both fixed and total variable costs ... revenue is number of computers sold time \$700

A little bit confused please put the final answer.
Thanks in advance.
 
Suraphel said:
A little bit confused please put the final answer.
Thanks in advance.
What are you confused about? Please let us know.. It'll give us a better idea about how to respond. We are not going to simply post the answer though you have essentially been give the solution already.

-Dan
 

Similar threads

MHB Break-Even Point: Manufacturing Company Analysis
  • · Replies 2 ·
Replies
2
Views
3K
MHB Rover's Friends: Calculating the Break-Even Price for Dog Washing
  • · Replies 2 ·
Replies
2
Views
2K
MHB What will the profit be if 1500 units are sold next year?
  • · Replies 3 ·
Replies
3
Views
2K
MHB How Much Did Each Computer Cost Before Finance Charges?
  • · Replies 1 ·
Replies
1
Views
1K
MHB Rational function equation problem solving
  • · Replies 2 ·
Replies
2
Views
3K
I need help, please, designing a pool sensor for breaking . . .
  • · Replies 2 ·
Replies
2
Views
704
Cubical Pressure Vessel - Maximum Pressure Computation
  • · Replies 5 ·
Replies
5
Views
2K
MHB with Cost,Volumn,Profit and Trade Discount
  • · Replies 2 ·
Replies
2
Views
4K
Python Applying Accelerated Raymarching to Reduce Rendering Time
  • · Replies 0 ·
Replies
0
Views
2K
How Many Items Must Be Sold for a Company to Break Even?
  • · Replies 4 ·
Replies
4
Views
3K