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Break Even point and associated risks

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Given the prices and cost data shown in the accompanying table for each of the three firms, F, G, and H, answer the following questions.

Firm F G H
Sale price per unit $18.00 $21.00 $30.00
Variable operating cost per unit 6.75 13.50 12.00
Fixed operating cost 45,000 30,000 90,000

a. What is the operating breakeven point in units for each firm?
b. How would you rank these firms in terms of their risk?

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Solution Summary

This solution details how to compute break even points.

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Break Even Point (BEP) = Fixed Cost / (Unit Price - Variable Unit Cost)

Part (a)

Consider firm F:
BEP = ...

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