Break$-$even Analysis Exercise$-$Planes

YOU MUST SHOW YOUR CALCULATIONS TO RECEIVE POINTS

Step $1$: An airplane company has $$100$ million in fixed costs and variable costs per unit of $$2$

million. Planes sell on average for $$3$ million each. What is the company$$s breakeven

point in terms of the number of planes that need to be sold to break even? $(5$ points$)$

Step $2$: If the airplane company wants to make $$99$ million profit, how many planes will it have

to sell? $(5$ points$)$

Step $3$: If the company can sell $200$ planes, how much profit will the firm make? $(5$ points$)$