Your friend has decided to start designing small gadgets that help both adults and kids with anxiety, Serenity Touch. Your friend is a great artist and very creative, but does not have an understanding of accounting concepts. Your friend has asked for your assistance and is providing the information and questions below.

Information: 

• The gadget will sell for $2.90 per unit. 

• With the help of family, your friend has determined that 30,600 units can be produced each month. 

• Variable expenses to manufacture and sell one unit would be $1.84 

• Fixed expenses would total $48,154 per month. The fixed expenses include a nominal fee for you and a stipend for the family members who help. 

• If demand exceeds 30,600 units, your friend can rent a portable trailer that can serve as additional space for the increased production. The additional space would cost $2,408 per month (an additional fixed expense). Variable expenses would increase as a result of renting the additional facility. The increase in variable expenses would be an additional $0.19 per unit.

Required:  If the additional space is rented, how many units must be produced to prevent the business from experiencing a loss? Explain, support your response with appropriate calculations

Answer rating: 100% (QA)

Given that Fixed Expense 48154 per month Desired Profit 7500 per month So he has to earn atleast a m... View the full answer