2. In its first year, “Abol Buna Company” had the following experience
Sales = 25,000 units Selling price = Birr 100
TVC = Birr 1,500,000 TFC = Birr 350,000
Required:
a) Develop revenue, cost and profit functions for the company in terms of quantity.
b) Find the Breakeven point in terms of quantity
c) Convert the cost equation in terms of quantity into a cost equation in terms of revenue
d) Find the Breakeven revenue
e) If profit had been Birr 500,000 what would have been the sales volume (revenue) and the quantity of sales.
f) What would be the profit if sales were Birr 2,000,000?
6 answers