Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A plant is currently producing 1 0 0 , 0 0 0 piece / year of product. The variable cost ( which is proportional to

A plant is currently producing 100,000 piece/ year of
product. The variable cost (which is proportional to
production rate) is $1,000,000/year. The fixed charges
including overhead and general expenses are
$500,000/year. The plant sells all the product it produces
and is currently making a profit of $300,000/year.
Assume the price of the product does not change, the
break-even production rate in piece/year is:
Hint: You need to find the price per unit first, Revenue =
price/unit \times number of units.
Profit = Revenue - fixed cost - variable cost.
Break-even point means profit is zero.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered 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

Students also viewed these Chemical Engineering questions