Financial Overview and Break-Even Analysis of Bremend Ltd.Bremend Ltd is a maker of computer stands with unique financial characteristics that affect its

Financial Overview and Break-Even Analysis of Bremend Ltd.Bremend Ltd is a maker of computer stands with unique financial characteristics that affect its profitability. The company’s fixed costs are $500,000, regardless of production amount. Each computer stand sells for $120, with a variable cost of $70 per unit. This yields a contribution margin of $50 per unit, computed by deducting the variable cost from the selling price ($120 – $70 = $50).The factory’s maximum production capacity is 20,000 units. To calculate the break-even threshold, where total revenues equal total costs, split fixed costs by contribution margin per unit.\[\text{break-even point (units)} = \frac{\text{fixed costs}}{\text{contribution margin per unit}} \]\[\text{Break-Even Point} = \frac{\$500,000}{\$50} = 10,000 \text{ units} \].Therefore, Bremend Ltd needsSell 10,000 units to cover all fixed and variable expenditures. At the break-even point, selling 10,000 units generates $1,200,000 in revenue ($120 per unit) and $700,000 in variable costs ($70 per unit).Beyond the break-even threshold, each extra unit sold increases profit. Bremend Ltd expects to earn $1,800,000 in revenue (15,000 units x $120 per unit) and $1,050,000 in variable costs (15,000 units x $70 per unit). After subtracting the fixed expenses from the overall contribution margin (revenue minus variable costs), the greatest profit possible is:Profit = \text{Total Contribution Margin} minus \text{Fixed Costs} \][\text{max profit} = \$750,000 – \$500,000 = \$250,000 \]This research shows that Bremend Ltd can make a maximum profit of $250,000 if it sells 15,000 units as planned.\[\text{Total Contribution Margin} = (\text{Selling Price} – \text{Variable Cost}) �times \text{Units Sold} \]\[\text{Total Contribution Margin} = \$50 * 15,000 = \$750,000 \]\[\text{Maximum

Share This Post

Email
WhatsApp
Facebook
Twitter
LinkedIn
Pinterest
Reddit

Order a Similar Paper and get 15% Discount on your First Order

Related Questions

Instructions This  assignment will help students understand interface implementation as a  crucial software engineering component. You will implement the

Instructions This  assignment will help students understand interface implementation as a  crucial software engineering component. You will implement the given  interface in JAVA. Overall interface coding This assignment requires you  to write the Utilities211Code.java class which implements the  Utilities211Interface.java interface shown below. After you have written  the code for the

About an Accounting Internship  Introduction (1 paragraph).  Briefly inform the reader of the Experiential Learning Activity you took part in by

About an Accounting Internship  Introduction (1 paragraph).  Briefly inform the reader of the Experiential Learning Activity you took part in by describing:   The name, date(s), and location(s) of the experiential learning event you participated in A brief overview of the organization’s mission and how it fits with your goals. A description