JETRO MARK D.

GONZALES 2 BSMA-A
Question 1
If the profit maximum at sales of 700 units does the firm have no choice but
to limit sale at this level? Explain your answer.
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Question 2
A business firm produces and sells a particular product. Variable cost is
₱30/unit. Selling prize ₱40 per unit. Fixed cost is ₱60,000.
a. What is the break-even quantity and break-even point? Show your solution.
Break even VC 30
SP 40
FC 60000
Units FC VC TC Rev
0 60000 0 60000 0 BEP 6000
1000 60000 30000 90000 40000
2000 60000 60000 120000 80000
3000 60000 90000 150000 120000
4000 60000 120000 180000 160000
5000 60000 150000 210000 200000
6000 60000 180000 240000 240000
Output (Q) TFC TVC TC MC TR MR Profit/Loss
0 500 0 500 0 -500
1 500 50 550 50 175 175 -375
2 500 90 590 40 350 175 -240
3 500 140 640 50 525 175 -115
4 500 200 700 60 700 175 0
5 500 270 770 70 875 175 105
6 500 350 850 80 1050 175 200
7 500 450 950 100 1225 175 275
8 500 600 1100 150 1400 175 300
9 500 800 1300 200 1575 175 375
*Price of steel is ₱175/unit