The carmaker is considering renting a place for mass-producing with a rent of 100000$/ month. Its avg
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The carmaker is considering renting a place for mass-producing with a rent of 100000$/ 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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