Question
You are manufacturing shirts with a machine purchased for 600.000 TL. With this machine, you plan to produce 5000 shirts per year over the next
You are manufacturing shirts with a machine purchased for 600.000 TL. With this machine, you plan to produce 5000 shirts per year over the next 5 years. The amount we will request for 1 shirt is 60 TL, and 25 percent of this amount will go to variable costs. Fixed Cost, on the other hand, is 40.000 TL annually which is for the salaries of the employees to operate the machine, the expenses such as maintenance, repair and insurance of the machine. The depreciation method of the machine is straight line and there is no salvage value at the end of the 5th year. If your tax rate is 20% and your cost of capital is 15%, Find out the break-even level of sales in accounting and finance perspective.
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