a shoemaker incurs an expense of rs 200 for producing a shoe she also incurs an additional expenditure of rs. 50,000 independent of the number of shoes produced. if she can sell a shoe during the season . she sells for rs. 300 else, she sells each shoe for rs. 150 if she produces 2000 shoes. Determine the number of shoe that she much sell during the season to breakeven.
Answers
Given : A shoemaker incurs an expense of Rs 200 for producing a shoe
she also incurs an additional expenditure of Rs. 50,000 independent of the number of shoes produced.
She can sell a shoe during the season . she sells for Rs. 300 else, she sells each shoe for rs. 150
She produces 2000 shoes.
To Find : the number of shoe that she much sell during the season to breakeven.
Solution:
At breakeven
Total Cost / Expenses = Total Revenue
Total Cost = Fixed Cost + Variable cost
Fixed cost = Rs 50000
Variable cost = 2000 * 200 = 400000 Rs
Total Cost = 450000 Rs
Let say x Numbers sold during the season
=> 2000 -x sold else
Revenue During season = 300x Rs
Else Revenue = 150(2000 - x) = 300000 - 150x Rs
Total Revenue = 300x + 300000 - 150x
= 300000 + 150x Rs
Equate Total Cost and Total Revenue
300000 + 150x = 450000
=> 150x =150000
=> x = 1000
Hence 1000 to be sold during the season for breakeven
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Answer:
He needs to sell 1000 shoes during seasion to meet the breakeven point.
Step-by-step explanation:
As per the data given in the question,
We have,
Expense on each shoe = Rs 200
Additional expenditure = Rs 50000
Cost of each shoe in season = Rs 300
Cost of each shoe off season = Rs 150
Total shoe produced = 2000
Now,
Let shoes were sold in season.
So, shoes sold in offseason will be
Since, we need to match the break even. The equation will be
Hence, he needs to sell 1000 shoes during seasion to meet the breakeven point.
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