# Fry Appliances has the following cost and revenue estimates for its new Hewlett Packard (hp)...

## Question:

Fry Appliances has the following cost and revenue estimates for its new Hewlett Packard (hp) laptop touchscreen model:

Fixed cost =$2.8million per year Cost per unit =$395

Revenue per unit = $550 a) Write the total of relation b) Determine the annual quantity needed to break even. c) Determine the annual quantity needed to make a profit of$0.04million.

## Break-even Analysis

Break-even analysis is to find the number of units of output that will pay the firm's fixed cost and yield a profit of zero. Of course, a firm wants to maximize its profit but the breakeven analysis gives management an idea of the volume of sales that are needed to break even.

The relation is BEQ = FC / (P - AVC)

Where:

• BEQ = Breakeven Quantity
• FC = Fixed Cost
• P = Price
• AVC = average variable cost.

Answe...

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