Question
Peter is the managerial accountant in charge of Company A, which sells water bottles. She previously determined that the fixed costs of Company A consist
Peter is the managerial accountant in charge of Company A, which sells water bottles. She previously determined that the fixed costs of Company A consist of property taxes, a lease, and executive salaries, which add up to P500,000. The variable cost associated with producing one water bottle is P80 per unit. The water bottle is sold at a premium price of P500.
REQUIREMENTS: a. Formulate the total cost function. b. Formulate the revenue function. c. Formulate the profit function. d. Determine the breakeven quantity and the breakeven sales. e. Use the graphical method to determine the breakeven point. i. Complete the table:
Quantity | Total Revenue | Total Cost | Profit (Loss) |
0 | |||
100 | |||
200 | |||
300 | |||
400 | |||
500 |
ii. Graph the total revenue function and the total cost function, then identify the coordinates of the breakeven point.
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