Assignment EPM Justine
Assignment EPM Justine
Assignment EPM Justine
College of Engineering
Malolos City
MFE 405
ENGINEERING PRODUCTION MANAGEMENT
ASSIGNMENT NO. 1
Solution:
The break-even point is the point at which total revenue equals total costs, resulting in
zero profit. To find the break-even point, we can use the following formula:
Break-Even Point (in units) = Fixed Costs / (Selling Price per Unit - Variable Cost per
Unit)
Break-Even Point (in units) = $200,000 / ($80 - $20) = $200,000 / $60 = 3,333.33
Since you can't sell a fraction of a shoe, the company needs to sell approximately 3,334
pairs of sneakers to cover its costs and reach the break-even point.
This means that if the company sells fewer than 3,334 pairs, it will not cover its costs and
will experience a loss. Selling more than 3,334 pairs will result in a profit. The break-
even analysis helps the company understand the sales volume required to avoid losses
and make informed decisions about pricing and production levels.