A firm manufactures a product that sells for $12 per unit. Variable cost per unit is $9 and fixed cost per period is $1680.

Capacity per period is 1800 units.

(a) Develop an algebraic statement for the revenue function and the cost function.

(b) Determine the number of units required to be sold to break even.

(c) Compute the break-even point as a percent of capacity.

(d) Compute the break-even point in sales dollars.

(a) The revenue function is

TR=nothing.

Expert Solution

1.
TR=12x for x<=1800

2.
TC=9x+1680 for x<=1800

3.
=1680/(12-9)
=560

4.
=560/1800
=31.1111%

5.
=560*12
=6720

jeff jeffy answered 2 years ago

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