Memex Corp. manufactures memory expansion boards for microcomputers. The average selling price of its finished product is $180 per unit. The average variable cost per unit is $110. Memex incurs fixed costs of $1,260,000 per year.
a. What is the break-even point in unit sales?
b. What sales revenue must Memex achieve in order to break even?
c. What will be the company’s profit or loss at the following levels of sales for a year: 20,000 units? 17,500 units?