Question
A canteen prepares a plan for its operations for the next four months. According to management, the variable cost of an average meal sold in
A canteen prepares a plan for its operations for the next four months. According to management, the variable cost of an average meal sold in the canteen is ISK. 450. The average selling price of such a meal is ISK 950. Fixed costs are estimated at 14,000,000 kroner per month. You have to do a break-even analysis (break-even point) based on four months and answer the three questions below in whole numbers:
1. What will be the zero point in units (based on four months)? The number of units is 112,000 pieces
2. What total number of units must be both produced and sold for the total profit of the four months to be ISK 6,000,000?
The number of units is then ___ pieces
3. What price would have to be obtained per unit to break even at 110,000 units? The price per unit is then ___ kroner
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