Brass Widgets Inc. makes and sells 200 high quality intricate fittings every week. The fixed costs for buildings, machines and employees are $12,000 a week, while raw material and other variable costs are $80 per unit.

(a) (11 marks) If the selling price is $130 per unit, what is the break-even number of units? Find the break-even point algebraically and illustrate it using an EXCEL graph. Attach the printout or copy your EXCEL graph into your assignment submission. On your graph, identify the region corresponding to profits and the region corresponding to losses.

EXCEL Instructions: Create a column called Number of Units and in that column enter values from 0 to 400 in increments of 20. Then create two more columns, one for Total Cost and another for Total Income. Enter appropriate formulae in EXCEL to obtain the total cost and total income corresponding to each value in the Number of Unitss column. Highlight the resulting three sets of numbers and go to the Insert tab (or Chart menu) to obtain an appropriate diagram. Make sure that your graph has been labelled appropriately (i.e. title, axis labels, legend). Please refer to Topic 3 in the EXCEL Booklet for further instructions on entering formulae and graphing in EXCEL.

(b)(5 marks) Based on your graph from part (a), is there a profit or a loss if 200 units are sold in a week at a price of $130 per unit? Explain briefly. Calculate the weekly profit or loss amount.

(c)(9 marks) How many units should the company produce per week to make a profit if the selling price is lowered to $100 per unit? Is the rise in sales to 450 units per week sufficient for the company to make a profit? Explain briefly and then calculate the resulting weekly profit or loss amount.