Dawn peanut butter and jelly sandwiches Inc. has fixed costs of $90,000. Its product currently sells for 6$ per unit and has variable costs of 2$ per unit Mr. Jiff the head of manufacturing proposes to buy new equipment that will cost $300,000 and drive up fixed costs to $220,000. Although the price will remain set at six dollars per unit, the increased automation will reduce cost per unit to $1.50.

as a result of Jiff’s suggestion, will the break even point go up or down? Compute the necessary numbers to support your answer. 

Break-even and conditional format
Question 1:
Ensco Lighting Company has fixed costs of $100,000, sells its units for $28, and has variable costs of $15.50 per unit.
a. Compute the break-even point.
b. Create a break-even graph in Excel
Units of: 6,000 7,000 8,000 9,000 and 10,000, and 11,000
Hint: calculate the total sales, and the total cost. The intersection should be your break-even in units.
c. Ms. Watts comes up with a new plan to cut fixed costs to $75,000. However, more labor will now be required, which will increase variable costs per unit to $17. The sales price will remain at $28. What is the new break-even point?
d. Under the new plan, what is likely to happen to profitability at very high volume levels (compared to the old plan)?
Question 2: Your manager provided you with the following information in a pivot-table.

Summarize how conditional format might be used in Excel to alert a user when actual dollars spent exceed the budget. Feel free to duplicate an example in Excel.

You want to start a firm whose output you believe you can sell for $25 per unit. The operation will require fixed costs of $10,000, and the variable costs are expected to be $18 a unit. What will be the break-even level of output?

ABC Inc. Manufactures biotech sunglasses. The variable materialscost $1.43 per unit and the variable labour cost is $2.44 perunit.

1. What is the variable cost per unit? ($3.87)
2. Suppose the firm incurs fixed costs of $650,000 during a yearin which total production is 320,000 units. What are the totalcosts for the year? ($1,888,400)
3. If the selling price is $10 per unit, what is the cashbreak-even point? If depreciation is $190,000 per year, what is theaccounting break-even point? (106,036 units; 137,031 units)