Analyze the following Graph and the breakeven point and discuss how this analysis is used for decision making?

If fixed costs are $400,000, selling price per unit is $150, and variable cost per unit is $100, how many units must the company sell in order to earn a profit of $ 100,000?

$65 $60 Total Revenue Line $55 $50 545 Breakeven Point in Sales Dollars Profit Area $40 $35 Total Cost Line Dollars (in thousands) Variable Costs $50/unit $30 $25 Loss Area $20 $15 $10 Fixed Costs $20,000 Breakeven Point in Units 55 0 100 200 500 600 700 300 400 Units of Output