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Break Even Point - Revenue & Quantity

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A. A Pool Supply sells all types of billiard equipment, and is considering manufacturing their own brand of pool cues. Mysti Farris, the production manager, is currently investigating the production of a standard house pool cue that should be very popular. Upon analyzing the costs, Mysti determines that the materials and labor cost for each cue is $25, and the fixed cost that must be covered is $2,400 per week. With a selling price of $40 each, how many pool cues must be sold to break even? What would the total revenue be at this break even point?

b. Mysti Farris believes that there is a high probability that 120 pool cues can be sold if the selling rice is appropriately set. What selling price would case the break-even point to be 120?

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a. A Pool Supply sells all types of billiard equipment, and is considering manufacturing their own brand of pool cues. Mysti Farris, the production manager, is currently investigating the production of a standard house pool cue that should be very popular. Upon analyzing the costs, Mysti determines ...

$2.19
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Break-Even Point - Algebra

1. (Supplement A) Richard Winchester, owner of Winchester Products, is considering whether to produce a new product. He has considered the operations requirements for the product as well as the market potential. Richard estimates the fixed costs per year to be $40,000 and variable cost for each unit produced to be approximately $50.

a) If Richard sells the product at a price of $70, how many units of product does he have to produce and sell in order to break even? Solve both graphically and algebraically.
b) Richard forecasts sales of 3,000 units if the selling price is set at $70, and 3,800 units if the selling price is set at $65. Which pricing strategy would you recommend to Richard? Why?

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