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Break-Even Analysis

Break-Even & Profit

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 mont

Financial Economics: ROA/ROE, butterfly spread , option strategy

1. Firm A and Firm B have the same ROA, yet firm A's ROE is higher. How can you explain this? 2. A butterfly spread is the purchase of one call at exercise X1, the sale of two calls at exercise price X2, and the purchase of one call at exercise X3. Assume that X1 = 20, X2 = 25, and X3 = 30. Graph the payoff structure to t

What happens at a company's break-even point?

What happens at a company's break-even point? How can you compute the break-even point for a company? How can a change in costs for a product or service be incorporated into the break-even calculation?

Homework Questions

4. Break-Even Analysis 5. Ratio Analysis Required: Calculate the requested ratios using the financials below: Income Statement (figures in millions of dollars) Net sales 16,725 Cost of goods sold 5,372 Other expenses 5,105 Depreciation 1,823 Earnings before interest and taxes (EB

In order to just break even, how much will the company have to charge for each set? How much will it have to charge per set to obtain this profit? If the company wants to earn a markup of 50 percent on its variable costs, how many sets will it have to sell?

Writers' Pleasure, Inc. produces gold-plated pen and pencil sets. It has a fixed annual cost of $50,000, and the average variable cost is $20. It expects to sell 5,000 sets next year. a. In order to just break even, how much will the company have to charge for each set? b. Based on its plant investment, the company require

Decision Making Cost Concepts

Please show me how to arrive at the correct answers. Product A: Selling Price $10 Variable Costs $5 Fixed Costs $2000 Product B: Selling Price $12 Variable Costs $10.00 Fixed Costs $6 Q. [a] If these products are sold in the ratio of 4a to 3b, what is break even point? what about 5a to 5b? In order to maximiz

Richard's Breakeven Point Calculations

Rewrite the formula above, to make it appropriate for breakeven calculations All these ques. refer to data listed: Where is Richard's breakeven point" Fixed costs $20,000 Variable costs 33% of sales avg sellings price is $10,000 a. as a % of sales, what is its variable or contribution margin? b. I

decomposing personal income into wealth income

I've been asked to find data on aggregate income. However, I also need to find data on labour and wealth income dis-aggregated. I assume this means find variables that could be used to represent total labour income and wealth income (to compare against total income; ie. GDP). What possible variables could be used? Eg. for

Important Aspects of Profit Maximization

1. A monopolist has the possibility of price discriminating between domestic and foriegn markets for a product. The demands are Qd = 21-0.1P in the domestic market and Qf = 50-0.4P in the foriegn market. The monopolist's short-run total cost function is STC = 2000+10Q, where Q = Qd+Qf. a. Calculate the profit-maximizing,