Question: A service center has installed a new computer system with local area networking at a cost of $1.6 million. The system is expected to serve

A service center has installed a new computer system with local area networking at a cost of $1.6 million. The system is expected to serve for 8 years, and straight-line depreciation is acceptable. There are additional fixed costs of

$300,000 per year. This service repair center charges each customer a flat fee of $30. The variable costs are $20. What will profit be if the annual volume is

(a) 50,000 units?

(b) 25,000 units? and

(c) 75,000 units? What is the breakeven point?

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