Question
Sorento Computers PLC sell one type of computer and sells them for 500 per unit. Each computer costs the business 250 to buy from the
Sorento Computers PLC sell one type of computer and sells them for 500 per unit. Each computer costs the business 250 to buy from the producer. There is also a fixed cost of 5,000 per month to run the business. Given the following: q = demand p = price f = fixed cost u = unit cost TR = Total revenue = pq TC = Total cost = f + uq = Profit = TR TC
a) Conduct breakeven analysis in table format and show at which level of demand the business breaks-even. (40 marks)
b) Conduct algebraic analysis to confirm the breakeven point calculated in part a). (40 marks)
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