Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

BREAK-EVEN ANALYSIS: Sonic Master Ltd fabricates reading glasses. It expects to sell 600 reading glasses a month. The fixed cost of operating the workshop for

image text in transcribed
BREAK-EVEN ANALYSIS: Sonic Master Ltd fabricates reading glasses. It expects to sell 600 reading glasses a month. The fixed cost of operating the workshop for a month totals $1500. Each reading glass requires materials that cost $4, and each takes one hour to make. The business pays the worker $18 an hour. The reading glass are sold to a wholesaler for $30 each. However, the business has the opportunity to rent a reading glass fabricating machine. Doing so would increase the total fixed cost of operating the workshop for a month to $8700. Using the machine would reduce the labor time to 20 minutes per reading glass. The worker would still be paid $18 an hour. - Compute for the ff: ( 2 points) 1. Break-Even point if the machine is not rented, 2. and assuming the machine is rented - How much profit would the business make each month from selling reading glass: ( 4 points) 3. Profit - assuming that the machine is not rented; and 4. Profit - assuming that it is rented? - Create a BEP Chart for business renting a machine. (4points)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Smoke And Mirrors Inc Accounting For Capitalism

Authors: Nicolas Vron, Matthieu Autret, Alfred Galichon, George Holoch

1st Edition

0801444160, 978-0801444166

More Books

Students also viewed these Accounting questions

Question

2. List the advantages of listening well

Answered: 1 week ago