Break-even Analysis :sample question
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Power Notebooks plans to manufacture a new line of notebook computers. The screens cost $100 each. To set up assembly process required to produce screens in house would cost $100,000. Company could produce screens for $75. Number of notebooks that eventually will be produced (Q) is unknown at this point.
a) Set up a spreadsheet that will display total cost of both options for value Q.
b) use a graphical procedure to determine the breakeven point for Q(i.e., the quantity at which both options yield the same cost)
c) use an algebraic procedure to determine the break-even for Q
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Solution Summary
Break-even analysis is exemplified.
Education
- BE, Bangalore University, India
- MS, University of Wisconsin-Madison
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