Question
Can someone check my work? Thank you! 1. Company A makes one product, called alpha. They have fixed costs of $150,000. Each alpha sells for
Can someone check my work? Thank you!
1. Company A makes one product, called alpha. They have fixed costs of $150,000. Each alpha sells for $9, and has $7 per unit in variable costs to produce. Find the operating breakeven quantity for Company A.
$9 - $7 = $2 per unit
$150,000 / 2 = 75,000 units
2. Using the information from problem 1 above, assume that Company As fixed costs increase to $180,000, and the variable costs increase to $7.50 per unit. Find the operating breakeven quantity for Company A.
$9 - $7.5 = $1.50 per unit
$180,000 / 1.5 = 120,000 units
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