A company has prepared the following statistics regarding its production and sales at different capacity levels. 1.
Question:
A company has prepared the following statistics regarding its production and sales at different capacity levels.
1. At what point is break-even reached in sales dollars? In units?
2. If the company is operating at 60% capacity, should it accept an offer from a customer to buy 10,000 units at $3 perunit?
Transcribed Image Text:
Capacity level Units Sales Total costs 100% 100,000 $400,000 60% 80% 80,000 60,000 . $240,000 $320,000 Variable Fixed Total costs . $120,000 150,000 $270,000 ..$(30,000) $160,000 150,000 $310,000 S 10,000 $200,000 150,000 $350,000 S 50,000 Net operating income (loss) .
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