Question
Casey Corporation is a manufacturing company that makes small electric motors it sells for $47 per unit. The variable costs of production are $27 per
Casey Corporation is a manufacturing company that makes small electric motors it sells for $47 per unit. The variable costs of production are $27 per motor, and annual fixed costs of production are $340,000. |
Required: |
a. | How many units of product must Casey make and sell to break even? |
b. | How many units of product must Casey make and sell to earn a $80,000 profit? |
c. | The marketing manager believes that sales would increase dramatically if the price were reduced to $42 per unit. How many units of product must Casey make and sell to earn a $80,000 profit, if the sales price is set at $42 per unit? |
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