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C93, Inc. sells three products. Income statement information for the three products for the most recent year is given below: Product A Product B Product
C93, Inc. sells three products. Income statement information for the three products for the most recent year is given below: Product A Product B Product C Selling price per unit ..... $20 $18 $25 Costs: Variable costs ............ $128,000 $43,200 $137,500 Advertising ............... $ 17,500 $11,600 $ 22,900 Rent ...................... $ 13,800 $13,800 $ 13,800 Supervisor's salary ....... $ 24,600 $22,700 $ 26,800 Property taxes ............ $ 3,000 $ 4,000 $ 7,000 Units sold ................. 8,000 6,000 11,000 The rent is allocated to the three products equally and the property taxes are allocated based on the square footage each product uses in the factory. C93, Inc. is considering eliminating Product A. If Product A is eliminated, the space currently being used to produce Product A can be rented out for $14,400 per year. Calculate the number of units of Product A that would need to be sold next year in order for C93, Inc. to be economically indifferent between dropping and keeping Product A.
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