Business Analytical Decision Making

The Bozo Company has decided to do a breakeven analysis on their production process to determine if they could reduce their breakeven point. The following criteria apply:

Sales price of units $75

Variable cost per unit 25

Total Fixed costs $400,000

a. What is the current breakeven cost?

b. What would happen to the breakeven point if we lower our fixed costs by $100,000 but increased our variable cost by $5 per unit?

c. What would happen to the breakeven point if we increased our fixed cost by $200,000 and decreased our variable cost by $11 per unit?

d. Which of the above cost structures would you use if you were certain to have 40,000 units sold?

10. Minimize the following problem:

Z = 2A + 4B

4A + 6B >= 120

2A + 6B >= 72

B >= 10

>= means less than or equal to.