Purchase Solution

Breakeven Calculation

Not what you're looking for?

Ask Custom Question

Myers Implements is attempting to develop and market a new garden tractor. Fixed costs to develop and produce the new tractor are estimated to be $10,000,000 per year. The variable cost to make each tractor has been estimated at $1,800.00. The marketing research department has recommended a price of $4,000.00 per tractor.
(a) What is the breakeven level of output for the new tractor?
(b) If management expects to generate a target profit of $1,500,000 from the tractor each year, how many tractors must be sold?

Purchase this Solution
Solution Summary

Breakeven Calculation

Solution Preview

Breakeven level of output:

Contribution margin per tractor: 4000-1800= ...

Solution provided by:
Sheetal Jain, PGDM
Education
  • BComm, University of Delhi
  • Post Graduate Diploma in Management (Equivalent to MBA), All India Management Association
Recent Feedback
  • "Thanks"
  • "Thanks"
  • "Very good! "
  • "thanks"
  • "Thank you!"
Purchase this Solution
Free BrainMass Quizzes
IPOs

This Quiz is compiled of questions that pertain to IPOs (Initial Public Offerings)

Income Streams

In our ever changing world, developing secondary income streams is becoming more important. This quiz provides a brief overview of income sources.

Lean your Process

This quiz will help you understand the basic concepts of Lean.

Transformational Leadership

This quiz covers the topic of transformational leadership. Specifically, this quiz covers the theories proposed by James MacGregor Burns and Bernard Bass. Students familiar with transformational leadership should easily be able to answer the questions detailed below.

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.

View More Free Quizzes
Related BrainMass Solutions

  • SPREADSHEET EXERCISE: PERFORMING BREAKEVEN ANALYSIS AND SENSITIVITY ANALYSIS

    I have done a backwards calculation for insurance, but I think it's probably incorrect] The next step is to calculate your breakeven.

  • CVP question

    (correct identifying items to consider) (Correct math calculation to arrive at correct breakeven) IV.

  • break even model

    Breakeven Algebraic Expression: S = F / [1 - (VC/S) ] Using the figures from above and plugging them into the revised algebraic expression, the following results are derived to find the breakeven level of sales denoted by S*: Example Calculation

  • Break-even in dollars and units

    price = 1,200 X $1.25 = $1,500 The solution explains the calculation of break-even in dollars and units.

  • Variable expense/Break-Even/Net Income

    The solution explains the calculation of variable expenses, break-even and net income.

  • The Last Outpost

    The solution is in excel format that shows the calculation of breakeven point, target profit, under two (2) scenarios.

  • Breakeven Point

    The below calculation will give you the answer. If we assume sale of 1000 units then selling price is $1500. Variable cost will be $775 (250+150+75+100+200).

  • Determine the Margin of Safety

    If the company's actual sales are $238,000, its margin of safety is: (Round your intermediate calculation to the nearest dollar amount.

  • NPV, Breakeven analysis

    has answers to two questions on capital budgeting (calculation of project's expected NPV, standard deviation, and coefficient of variation) and Breakeven analysis.

View More Related Solutions