Question
A product at the Jennings Company enjoyed reasonable sales volumes, but its contributions to profits were disappointing. Last year, 15,000 units were produced and
A product at the Jennings Company enjoyed reasonable sales volumes, but its contributions to profits were disappointing. Last year, 15,000 units were produced and sold. The selling price is $23 per unit, the variable cost is $19 per unit, and the fixed cost is $72,000. $1,000,000- $900,000- a. What is the break-even quantity for this product? Use both graphic and algebraic approaches to get your answer. $800,000- $700,000- The break-even quantity according to the algebraic approach is Q $600,000- units. (Enter your response as an integer.) $500,000- To obtain the result with the graphic approach, plot the following: $400,000- 1.) Using the line drawing tool, draw the total cost line. Properly label the line. $300,000- $200,000- 2.) Using the line drawing tool, draw the total revenue line. Properly label the line. $100,000- $0- 3.) Using the point drawing tool, plot the point that corresponds to the break-even quantity. Label this point 'Q' 0 10,000 Carefully follow the instructions above, and only draw the required objects b. If sales were not expected to increase, by how much would Jennings have to reduce their variable cost to break even? The variable cost would have to reduce from $19 to $ per unit. (Enter 20,000 Quantity (Q) 30,000 40,000
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