Q3: A firm is operating at fixed cost of $400000 a revenue of $11 per unit a variable cost of $6 per init. (a) Determine the B.E.P. (b) If the number of the units produced is 100000, what is its annual profit. (c) If a worker training program is implemented, it is expected to reduce the variable cost to 5.75 per unit because of reduction in direct labour cost. What will be the B.E.P and annual profit?

Marketing
20th Edition
ISBN:9780357033791
Author:Pride, William M
Publisher:Pride, William M
Chapter19: Pricing Concepts
Section: Chapter Questions
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Q3: A firm is operating at fixed cost of $400000 a revenue of $11 per unit a variable cost of $6 per
unit. (a) Determine the B.E.P. (b) If the number of the units produced is 100000, what is its annual
profit. (c) If a worker training program is implemented, it is expected to reduce the variable cost to
5.75 per unit because of reduction in direct labour cost. What will be the B.E.P and annual profit?
Transcribed Image Text:Q3: A firm is operating at fixed cost of $400000 a revenue of $11 per unit a variable cost of $6 per unit. (a) Determine the B.E.P. (b) If the number of the units produced is 100000, what is its annual profit. (c) If a worker training program is implemented, it is expected to reduce the variable cost to 5.75 per unit because of reduction in direct labour cost. What will be the B.E.P and annual profit?
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