6.The capacity of an electronic firm is restricted to 8,000 units per month. Overall costs given that capacity is fully used are $ 820,000 If production is 6,000 units, overall costs are $660,000. The products are sold for $ 140 per unit.

Required:

a)The firm aims at achieving a sales profitability (profit/revenue) of 25%. How many units are to be sold to achieve this result?(6 marks)

b)Competitors in the market force the firm to lower prices. Only 85% of overall capacity is available. What sales price is needed if the firm wants to break even?(4 marks)

c)Demand for the firm's product is 10,000 units per month. The management considers an increase in capacity by 25%. Fixed costs would rise by 50% per month. Variable costs, however would decrease by 10%. What are the unit costs in this setting? Calculate profit it products are sold for $ 130 per unit.(4 marks)