you have calculated the following , fixed cost = $6000/month , variable cost = $3/unit, revenue...

you have calculated the following , fixed cost = $6000/month , variable cost = $3/unit, revenue = $8/ unit. 1. what is the break even point of the process. 2. quantity to produce for profit of $2000 per year

Expert Solution

1.

Break even point = fixed cost/contribution margin per unit = (6000*12)/(8-3) = 14400 units

2.

Let, no of units to produce = x

So, 8x-6000*12-3x = 2000

or, 5x = 74000

or, x = 74000/5

So, 14800 units required to be produced for profit of $2000 per year

keosha answered 2 years ago

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