Adam and his friend, Akmal, are both talented painters. Last year, they started painting postcards which they gave to their friends as a gift. After that, they began selling those postcards at a craft fair and sold them for fun. At the last fair, a buyer who really liked the postcards and offered them the contract to paint 500 postcards of a specific design for a price of RM2,000. With the inerease in demand, Adam and Akmal decided to open a business and named it as 4A Craft. Each postcard priced at RM4.00. Variable operating costs amounted to RM1.50 per postcard. To produce the posteards for the contract, they have to buy a specilic machine for cutting the postcard, which cost the amount of RM700. (i) Solve for 4A Craft's operating breakeven point value. (ii) Solve for of 4A Craft's EBIT value of that contract.
Adam and his friend, Akmal, are both talented painters. Last year, they started painting postcards which they gave to their friends as a gift. After that, they began selling those postcards at a craft fair and sold them for fun. At the last fair, a buyer who really liked the postcards and offered them the contract to paint 500 postcards of a specific design for a price of RM2,000. With the inerease in demand, Adam and Akmal decided to open a business and named it as 4A Craft. Each postcard priced at RM4.00. Variable operating costs amounted to RM1.50 per postcard. To produce the posteards for the contract, they have to buy a specilic machine for cutting the postcard, which cost the amount of RM700. (i) Solve for 4A Craft's operating breakeven point value. (ii) Solve for of 4A Craft's EBIT value of that contract.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Adam and his friend, Akmal, are both talented painters. Last year, they started painting postcards which they gave to their friends as a gift. After that, they began selling those postcards at a craft fair and sold them for fun. At the last fair, a buyer who really liked the postcards and offered them the contract to paint 500 postcards of a specific design for a price of RM2,000. With the inerease in demand, Adam and Akmal decided to open a business and named it as 4A Craft. Each postcard priced at RM4.00. Variable operating costs amounted to RM1.50 per postcard. To produce the posteards for the contract, they have to buy a specilic machine for cutting the postcard, which cost the amount of RM700.
(i) Solve for 4A Craft's operating breakeven point value.
(ii) Solve for of 4A Craft's EBIT value of that contract.
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