Calculating BEP and total profit in the given case
Not what you're looking for?
RAZ, Inc. is considering launching a project for a 1 week sale of their patented golf clubs on The Home Shopping Network. They have decided if they can make at least a $1,000 return on the Fixed Costs of $10,000, they will launch the sale. Your marketing research predicted that total sales, at the $10.00 per unit price, would be at least 4,500 units. RAZ has provided you with their Direct Labor Costs per unit ($1.50) and their Material Costs per unit ($0.75).
a. What is the Break Even Point to cover costs and the $1,000 profit?
b. What will the total profit be if sales are 4,500 units as forecasted by marketing?
Purchase this Solution
Solution Summary
The solution describes the steps to calculate break even point and total profit in the given case.
Solution Preview
Variable cost per unit=V=direct labor cost per unit+direct material cost per unit=1.50+0.75=$2.25
Fixed cost=F=$10,000
Price per unit=P=$10
Contribution margin ...
Education
- BEng (Hons) , Birla Institute of Technology and Science, India
- MSc (Hons) , Birla Institute of Technology and Science, India
Recent Feedback
- "Thank you"
- "Really great step by step solution"
- "I had tried another service before Brain Mass and they pale in comparison. This was perfect."
- "Thanks Again! This is totally a great service!"
- "Thank you so much for your help!"
Purchase this Solution
Free BrainMass Quizzes
Lean your Process
This quiz will help you understand the basic concepts of Lean.
Organizational Leadership Quiz
This quiz prepares a person to do well when it comes to studying organizational leadership in their studies.
Learning Lean
This quiz will help you understand the basic concepts of Lean.
Writing Business Plans
This quiz will test your understanding of how to write good business plans, the usual components of a good plan, purposes, terms, and writing style tips.
Production and cost theory
Understanding production and cost phenomena will permit firms to make wise decisions concerning output volume.