Question: The carmaker is considering renting a place for mass-producing with a rent of 100000$/ month. Its avg demand is 200,000 items/month. In the summer months

The carmaker is considering renting a place for mass-producing with a rent of 100000$/ month. Its avg demand is 200,000 items/month. In the summer months (June-August) the demand goes down to 10,000 items/month and in November up to 30,000 items/ month. The total cost of producing the car is 500$ and the sales price 1500$.

a. What is the break-even sales quantity?

b. Is the company making profit or loss during the summer months?

c. How much profit are they generating in December?

d. How much profit/ loss do they make on annual basis?

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