Back to Assignment Attempts Keep the Highest: 74 1. Break-even analysis To be profitable, a firm must recover its costs. These costs include both its fixed and its variable costs. One way that aimevaluates at what stage it would recover the invested costs is to calculate how many units or how much in dollar sales is necessary for the firm to earn a profit Consider the case of Blue Mouse Manufacturers: Blue Mouse Manufacturers is considering a project that will have fixed costs of $15,000,000. The product will be sold for $41.50 per unit, and will incur a variable cost of $12.50 per unit Given Blue Mouse's cost structure, it will have to se units to break even on this project (Q) Blue Mouse's marketing and sales director doesn't think that the firm's market is big enough for the firm to break web. In fact, the believes that the firm will be able to sell only about 175,000 units. However, she also think that the demand for Blue House's product is relatively into the form can increase the sales price without significantly decreasing the volume of product sold). Atoming that the form can 175,000 unts, what price must it set to break even? 190.51 per unit $110.21 per unit 5108,36 per unit $93.58 per unit