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Breakeven volume

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Problem 1
Prepare financial analysis of Panorama. The analysis should include a summarization of the ratio analysis, explanations of what those ratios tell about the financial condition of Panorama, and a summarization of the financial strength and weaknesses of Panorama.
What information do I need to use for the Financial analysis?

Problem 2
When Maria was considering buying the peanut butter cookie plant, one of her options was to convert it to make more lemon crème cookies, since near-term demand for the lemon crème cookies exceeded current capacity by 600,000 packs. What should Maria have done if the breakeven volume of lemon crème cookies in this new plant were 650,000 packs and continuing to make peanut butter cookies would not have been profitable? detailing the contribution margin and breakeven analysis, what those results mean, and how Maria can use that information to help achieve the company's goals. What information do I need to solve this problem and how do I go about solving this?

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Solution Preview

Problem 1
Prepare financial analysis of Panorama. The analysis should include a summarization of the ratio analysis, explanations of what those ratios tell about the financial condition of Panorama, and a summarization of the financial strength and weaknesses ...

Solution Summary

This discusses the steps to compute the breakeven volume

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See Also This Related BrainMass Solution

Calculating Break-Even Volume and Creating Break-Even Chart

Peter, a president of a company produces power transformers for personal computer manufacturers. Peter's choice of the various methods by which a new model of transformer can be built has been narrowed to 3 choices. He estimates the product life of the transformer to be one year. Marketing has estimated that it can sell 5,000 of these new transformers within the time period. The 3 alternatives are:

1. Use existing equipment and fixtures, and hire high
-skilled machinists and technicians at $16.00 per hour (including benefits). With this method, each transformer will require 2 labor hours to assemble.

2. Use existing equipment, but invest $30,000 in new fixtures and instruction manuals to simplify some of the more complicated operations. Semiskilled workers can be employed at $12.00 per hour (including benefits), with each transformer requiring 1 labor hour to complete.

3. Invest $75,000 in new equipment, fixtures, and instruction manuals. This approach would eliminate all of the complicated procedures, thereby requiring only unskilled labor, which could be hired for $6.00 an hour (including benefits). With this method, each transformer would require 20 labor minutes to complete.

These are the questions that I am completely lost on. I have to do this in Excel.

A. Make a break-even chart using total cost versus volume for the above processes.

B. Calculate the 2 break-even volumes (i.e., those volumes at which you shift from one process to another).

C. Which alternatives would choose and why?

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