Management believes it can sell a new product for 8 50
Management believes it can sell a new product for $8.50. The fixed costs of production are estimated to be $6,000, and the variable costs are $3.20 a unit.
a. Complete the following table at the given levels of output and the relationships between quantity and fixed costs, quantity and variable costs, and quantity and total costs.
b. Determine the break-even level using the above table and use Equation 19.5 to confirm the break-even level of output.
c. What would happen to the total revenue schedule, the total cost schedule, and the break-even level of output if management determined that fixed costs would be $10,000 instead of $6,000?
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