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Lesson 3 Exercises Problem No. 4

The document provides two break-even analysis problems and solutions. The first problem asks how many units of a product must be produced and sold to break even given fixed costs of $100,000 per month and variable costs of $300 per unit for direct labor, $400 per unit for materials, and $100 per unit for other variables, with a selling price of $1200 per unit. The solution is 250 units. The second problem asks how many ice blocks an ice plant must sell per month to break even given various fixed and variable costs and a selling price of $55 per block. The solution is 1,228 ice blocks.

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Joemarc Lapuz Aguinaldo
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287 views1 page

Lesson 3 Exercises Problem No. 4

The document provides two break-even analysis problems and solutions. The first problem asks how many units of a product must be produced and sold to break even given fixed costs of $100,000 per month and variable costs of $300 per unit for direct labor, $400 per unit for materials, and $100 per unit for other variables, with a selling price of $1200 per unit. The solution is 250 units. The second problem asks how many ice blocks an ice plant must sell per month to break even given various fixed and variable costs and a selling price of $55 per block. The solution is 1,228 ice blocks.

Uploaded by

Joemarc Lapuz Aguinaldo
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
Download as pdf or txt
Download as pdf or txt
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Module 3: Activity No.

4
Break – Even AnalysisExercises Problem

Name: Aguinaldo, Joemarc Jester L. Aguinaldo


Student No. 20190165721

Problem:

1. The direct labor cost and material cost of a certain product are P300 and P400 per unit
respectively. Fixed charges are P100,000 per month and other variable costs are P100
per unit. If the product is sold at P1200 per unit, how many units must be produced and
sold to break- even? Ans. 250 units

𝑃(𝑥 ) = 𝐹𝐶 + 𝑉 (𝑥 ) + 𝑙𝑎𝑏𝑜𝑟 (𝑥 ) + 𝑚𝑎𝑡𝑒𝑟𝑖𝑎𝑙 (𝑥 )


1200(𝑥 ) = 100,000 + 300(𝑥) + 400(𝑥) + 100(𝑥)
𝑥 = 250 𝑢𝑛𝑖𝑡𝑠

2. Compute for the number of ice blocks that an ice plant must be able to sell per month to
break- even based on the following data:
Cost of electricity per block……… P20
Tax to be paid per block………….P2
Real estate tax…………………….P3,500/month
Salaries and wages………………P25,000/month
Others……………………………… P12,000/month
Selling price……………………….P55/ice block
Ans. 1228 ice blocks

𝐿𝑒𝑡 𝑥 = 𝑁𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑏𝑙𝑜𝑐𝑘𝑠 𝑡𝑜 𝑏𝑒 𝑠𝑜𝑙𝑑 𝑝𝑒𝑟 𝑚𝑜𝑛𝑡ℎ


𝐼𝑛𝑐𝑜𝑚𝑒 = 𝐸𝑥𝑝𝑒𝑛𝑠𝑒𝑠
55𝑥 = 20𝑥 + 2𝑥 + 3,500 + 25,000 + 12,000
𝑥 = 1227.27 𝑜𝑟 1228 𝑖𝑐𝑒 𝑏𝑙𝑜𝑐𝑘𝑠

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