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MBA,MCS,M.phil
Devry University
Jan-2008 - Jan-2011
MBA,MCS,M.Phil
Devry University
Feb-2000 - Jan-2004
Regional Manager
Abercrombie & Fitch.
Mar-2005 - Nov-2010
Regional Manager
Abercrombie & Fitch.
Jan-2005 - Jan-2008
Juan Alavanca is evaluating the risk of two companies in the machinery industry: The Gearing Company and Hebelkraft, Inc. Alavanca used the latest fiscal year’s financial statements and interviews with managers of the respective companies to gather the following information:
| Â |
The Gearing Company |
Hebelkraft, Inc. |
|
Number of units produced and sold |
1 million |
1.5 million |
|
Sales price per unit |
$200 |
$200 |
|
Variable cost per unit |
$120 |
$100 |
|
Fixed operating cost |
$40 million |
$90 million |
|
Fixed financing expense |
$20 million |
$20 million |
| Â | Â | Â |
Based on this information, the breakeven points for The Gearing Company and Hebelkraft, Inc. are:
A. 0.75 million and 1.1 million units, respectively.
B. 1 million and 1.5 million units, respectively.
C. 1.5 million and 0.75 million units, respectively
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