Chapter 16 Assignment Back to Assignment Attempts: Average: /2 3. Operating break-even graph analysis When does a firm achieve it’s operating break-even point?
Your company is considering altering its operations going forward but is unsure about how this should happen. You’ve 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 Port Co. Selling price per unit $10 Variable cost per unit $2.5 Fixed operating costs $300 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. Operating costs Sales Revenue Revenues and Costs (Millions of Dollars) Break-even Point 0 10 20 80 90 100 30 40 50 60 70 Units Produced and Sold Assume that the actual sales for the current period equal 30 million units. Considering your operating break-even analysis, will Port Co. be profitable at this level of sales? ο No Not enough information given Yes Grade It Now