Question

In: Finance

Category Cost: Rent Monthly, cost $3000, Utilities Monthly $1100, Insurance Quarterly $1200, Property Taxes, annually $6000,...

Category Cost: Rent Monthly, cost $3000, Utilities Monthly $1100, Insurance Quarterly $1200, Property Taxes, annually $6000, Steel per shelf $9.00, forming per shelf $.25, Labor per shelf $.75 Price charged per shelf $20.00 This company will break even with monthly production of ____ units, and sales of __________

250; $5000

!0,000; $500

$5000; 250

500; $10,000

Solutions

Expert Solution

Break even units = Monthly fixed costs/(Selling price per unit - variable cost per unit)

= [3000+1100+1200/3 + 6000/12]/(20-9-0.25-0.75)
= 500 units

Sales = 500*20

= $10,000

Hence, the answer is

500; $10,000


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