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    Break even analysis : Graphical

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    Draw two break-even graphs-one for a conservative firm using labor-intensive production and another for a capital-intensive firm. Assuming these companies compete within the same industry and have identical sales, explain the impact of changes in sales volume on both firms' profits.
    Although no example is provided in the textbook problem, we suggest you use these assumptions to create an Excel line chart (break-even chart).

    Labor Capital
    Intensive Intensive
    Selling price $12.00 $12.00
    Variable cost per unit $8.00 $5.00
    Fixed costs $250,000 $300,000

    Solution
    Problem 5-7
    Instructions

    Complete the tables below for both the Labor Intensive and capital intensive firms.

    Labor Intensive Company
    Units 0 25,000 50,000 75,000
    Total Revenue
    Variable costs
    Contribution margin
    Fixed Costs $250,000
    Total Costs
    Profit

    Capital Intensive Company

    Units 0 25,000 50,000 75,000
    Total Revenue FORMULA FORMULA FORMULA FORMULA
    Variable costs FORMULA FORMULA FORMULA FORMULA
    Contribution margin FORMULA FORMULA FORMULA FORMULA
    Fixed Costs $300,000 FORMULA FORMULA FORMULA
    Total Costs FORMULA FORMULA FORMULA FORMULA
    Profit FORMULA FORMULA FORMULA FORMULA

    Explain the impact of changes in sales volume on both firms' profits.

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    https://brainmass.com/math/graphs-and-functions/break-even-analysis-graphical-87982

    Solution Summary

    This posting contains BEA of a Labor intensive firm and a capital intensive firm

    $2.19