Lucid Images Ltd manufactures premium high definition televisions. The firm’s fixed costs are$4,000,000 per year. The variable cost of each TV is $2,000, and the TVs are sold for $3,000 each. The company sold 5,000 TVs during the previous year. (In the following requirements, ignore income taxes)

Required:Treat each of the requirements as independent situations:

a) Calculate the break-even point in units. 

b) What will the new break-even point be if fixed costs increase by 10 per cent?

c) What was the company’s net profit for the previous year? 

d) The sales manager believes that a reduction in the sales price to $2,500 will result in orders for1,200 more TVs each year. What will the break-even point be if the price is changed? 

Answer rating: 100% (QA)

Answer Answer Part a Amount Sell price 300000 R Less Variable cost 200000 S Con... View the full answer