A retail store has fixed costs of $180,000 per year and a capacity to store and sell 850 dishwashers every year. It sells each unit for $500 and the variable costs are $140 per unit.

a. b.

c. How many units should it sell to earn a net income of $45,000 per year? What is the net income per year at capacity? Calculate the number of units it needs to sell to earn a net income of $45,000 per year if it decides to reduce the selling price of each unit by 15% and variable costs increase by 15%.

AppendixLO1