Question
Your company is considering altering its operations going forward but is unsure about how this should happen. Youve decided to take it upon yourself to
Your company is considering altering its operations going forward but is unsure about how this should happen. Youve decided to take it upon yourself to complete an operating break-even analysis for the company. Use the information in the table to complete the operating break-even graph that follows.
Operational Information for Wine Co. | |
---|---|
Selling price per unit | $16 |
Variable cost per unit | $11 |
Fixed operating costs | $150 million |
- Use the graph to determine the sales revenue and operating costs at various levels of production, as well as the operating break-even point.
Tool tip: Mouse over the points in the graph to see their coordinates.
2. Assume that the actual sales for the current period equal 39 million units. Considering your operating break-even analysis, will Wine Co. be profitable at this level of sales?
a. Yes
b. No
c. Not enough information given
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