Graphing Revenue and Costs, C-V-P Analysis
Not what you're looking for?
Graphing Revenues and Costs
Montana Company manufactures chocolate candy. Its manufacturing costs are as follows:
Annual fixed costs $15,000
Variable costs $2 per box of candy
1. Plot variable costs, fixed costs, and total costs on a graph for activity levels of 0 to 30,000 boxes of candy.
2. Plot a revenue line on the graph, assuming chat Montana sells the chocolates for $5 a box.
C-V-P Analysis
The Last Outpost is a tourist stop in a western resort community. Kerry Yost, the owner of the shop, sells hand-woven blankets for an average price of $30 per blanket. Kerry buys the blankets from weavers at an average cost of $21. In addition, he has selling expenses of $3 per blanket. Kerry rents the building for $300 per month and pays one employee a fixed salary of $500 per month.
1. Determine the number of blankets Kerry must sell to break even.
2. Determine the number of blankets Kerry must sell to generate a profit of $1,000 per month.
3. Assume that Kerry can produce and sell his own blankets at a total variable cost of $16 per blanket, but that he would need to hire one additional employee at a monthly salary of $600.
a) Determine the number of blankets Kerry must sell to break even.
b) Determine the number of blankets Kerry must sell to generate a profit of $1,000 per month.
Purchase this Solution
Solution Summary
This solution is comprised of a detailed explanation and calculation to plot graph for revenue and cost for Montana Company and use C-V-P analysis to assist Last Outpost to calculate the break even point.
Solution Preview
Graphing Revenues and Costs
Montana Company manufactures chocolate candy. Its manufacturing costs are as follows:
Annual fixed costs $15,000
Variable costs $2 per box of candy
1. Plot variable costs, fixed costs, and total costs on a graph for activity levels of 0 to 30,000 boxes of candy.
2. Plot a revenue line on the graph, assuming chat Montana sells the chocolates for $5 a box.
C-V-P Analysis
The Last Outpost is a tourist stop in a western resort community. Kerry Yost, the owner of the shop, sells hand-woven blankets for an average price of $30 per blanket. Kerry buys the blankets from weavers at an average cost of $21. In addition, he has selling expenses of $3 per blanket. Kerry rents the building for $300 per month and pays one ...
Purchase this Solution
Free BrainMass Quizzes
Organizational Behavior (OB)
The organizational behavior (OB) quiz will help you better understand organizational behavior through the lens of managers including workforce diversity.
IPOs
This Quiz is compiled of questions that pertain to IPOs (Initial Public Offerings)
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.
Marketing Research and Forecasting
The following quiz will assess your ability to identify steps in the marketing research process. Understanding this information will provide fundamental knowledge related to marketing research.
Employee Orientation
Test your knowledge of employee orientation with this fun and informative quiz. This quiz is meant for beginner and advanced students as well as professionals already working in the HR field.