Prepare a breakeven point for the top management of the firm
Prepare a breakeven point (BEP) for the top management of the firm. One thing they were sure to investigate was how quickly their investment would be recovered
1) Build an entire new production facility that would enable GEI to produce all of the products it needed,
2) Outsource production to build partners, 3) Expand the existing GEI facility to increase production.
Review the spreadsheet created above as a group and identify the production points where each option is attractive. Draw a chart (by hand or with spreadsheet software) showing the total cost lines of the three options. Plot total cost on the Y-axis and units of production on the X-axis for the three options. Identify the option that makes the most financial sense for the firm for 12,000, 13,000 and 28,000 units.