A product at the jennings company enjoyed reasonable sales volumes, but its contributions to profits were disappointing.
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Question:
A product at the jennings company enjoyed reasonable sales volumes, but its contributions to profits were disappointing. last year, 17,500 units were produced and sold. the selling price is $22 per unit, the variable cost is $18 per unit, and the fixed cost is $80,000.
a) what is the break-even quantity for this product? use graphic approach for your answer.
b) if, sales were not expected to increase, by how much would jennings have to reduce their variable cost to break even?
Related Book For
Operations management processes and supply chain
ISBN: 978-0136065760
9th edition
Authors: Lee J Krajewski, Larry P Ritzman, Manoj K Malhotra
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