break-even calculations Ralph is planning a visit to the bank to solicit a small business loan. Ralph's business plan, in summary form, is given by the following LLAs:

revenue TR = 240q;

rnanufacturing cost TMC = 125,000 + lOOq; and selling and administrative S&A = 85,000 + 20q.

a] The bank, after studying Ralph's numbers, asks what the break-even point is.
What is it, and why might the bank be interested in it?
b] Ralph then points out that the business plan ealls for produetion of q = 2,500 units the first year. Under GAAP st yle ineome measurement, using aetual, full eosting, how many units must Ralph sell in the first year for aeeounting ineome to be zero?
e] Explain the differenee between your two break-even ealeulations.
d] What would you, as the banker, say to Ralph's eomment in [b] above?AppendixLO1