A company produces and sells a single product. The company's total fixed costs are $40,000 per year.
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Question:
A company produces and sells a single product. The company's total fixed costs are $40,000 per year. The selling price of the product is $50, and the variable cost per unit is $30. The company expects to sell 6,000 units in the next year.
a. Calculate the company's breakeven point in units and in dollars.
b. If the company wants to earn a target profit of $50,000 next year, how many units must it sell?
c. If the company reduces its variable cost by $5 per unit, how many units must it sell to breakeven?
Related Book For
Engineering Economy
ISBN: 978-0132554909
15th edition
Authors: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
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