Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The automotive supply company has a small plant that produces a speedometer exclusively. Its annual fixed cost is $30,000, and its variable cost is $10

The automotive supply company has a small plant that produces a speedometer exclusively. Its annual fixed cost is $30,000, and its variable cost is $10 per unit. it can sell a speedometer for $25.

a) How many speedometers must the company sell to break even?

b) What is the break-even revenue?

c) The company sold 3,000 units last year. What was its profit?

d) Next year's fixed cost are expected to rise to $37,500. What will be the break-even quantity?

e) if the company will sell the number of units obtained in part "d" and wants to maintain the same profit as last year, what will its new price have to be?

Step by Step Solution

3.48 Rating (164 Votes )

There are 3 Steps involved in it

Step: 1

a Break Even Point Fixed Cost Sellint price Variable cost Where as Fixed Cost 3000000 Selling price ... blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Introduction to Management Science

Authors: Bernard W. Taylor

11th Edition

132751917, 978-0132751919

More Books

Students also viewed these Accounting questions

Question

Digital transformation requires talents in the following areas

Answered: 1 week ago