A plastic cup manufacturer is considering adding a new plant to keep up with growth in demand. The location being considered will have fixed costs of $15,200 per month and variable costs of $10 per box of 1,000 cups produced. Cups are sold for a price of $15 per box of 1,000.
Technology
Variable Cost
a. What volume of cups is required per month to break even?
b. What profit would be earned on 6,000 boxes?
c. What volume is required to obtain a profit of $10,000 per month?
d. Plot the total cost and total revenue lines.