Question
A manufacturing company is studying the feasibility of producing a new product. A new production line could manufacture up to 850 units per month at
A manufacturing company is studying the feasibility of producing a new product. A new production line could manufacture up to 850 units per month at a cost of $60 per unit. Fixed cost would be $25,400 per month. Variable selling and shipping cost are estimated to be $35 per unit. Market research indicates that a unit price of $135 would be competitive. (a) What is the break-even point as percent of capacity? (b) What would be the net income at 72% capacity? (c) What would unit sales have to be to attain a net income of $12,500 per month? *
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