A producer of pottery is considering the addition of a new factory to absorb the backlog of demand that now exists. The primary location being considered will have fixed cost of $10,000 per month and variable cost of $1 per unit produced. Each item is sold to retailers at a price that averages $2.
a. What quantity' per month is required in order to break even?
b. What profit would be realized on a monthly quantity of 20,000 units?
c. What quantity' is needed to obtain a profit of $ 16,000 per month?
d. What quantity' is needed to provide revenue of $23,000 per month?
e. Plot the total cost and total revenue lines against quantity per month.