Balance, Inc., is considering the introduction of a new energy snack with the following price and cost characteristics:
Sales price . . . . . . . . . . . $ 1.00 per unit
Variable costs . . . . . . . . . 0.20 per unit
Fixed costs . . . . . . . . . . . 400,000 per month
Required
a. What number must Balance sell per month to break even?
b. What number must Balance sell per month to make an operating profit of $100,000?