XYZ company's cost function for the next four months is C=500,000 + 5Q
A, find the BE dollar volume of sales if the selling price is br. 6/unit
To find the BE dollar volume of sales, we need to first find the BE quantity of sales. This is the point where total revenue equals total cost, or where:
TR = P x Q = C
In this case, the selling price (P) is RM6/unit, and the cost function (C) is C = 500,000 + 5Q. So we have:
6Q = 500,000 + 5Q
Q = 500,000
This is the BE quantity of sales in units. To find the BE dollar volume of sales, we multiply this by the selling price:
BE sales = Q x P = 500,000 x RM6 = RM3,000,000
Therefore, the BE dollar volume of sales is RM3,000,000.
To find the Break-Even (BE) dollar volume of sales, we need to equate the total cost function to the total revenue.
Given:
Cost function (C) = 500,000 + 5Q
Selling price = 6 Br./unit
Total revenue = Selling price x Quantity (R = P x Q)
At the break-even point, total cost = total revenue, so we have:
500,000 + 5Q = 6Q
To solve for Q (quantity), let's isolate Q on one side of the equation:
500,000 = 6Q - 5Q
500,000 = Q
Now, let's find the break-even dollar volume of sales by multiplying the quantity (Q) by the selling price (P):
BE dollar volume of sales = Q x P
BE dollar volume of sales = 500,000 x 6
BE dollar volume of sales = 3,000,000 Br.