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Cost-volume-profit relationship Casey Corporation manufactures faucets. The variable costs of production are $30 per faucet. Fixed costs of production are $900,000. Casey sells the faucets

Cost-volume-profit relationship

Casey Corporation manufactures faucets. The variable costs of production are $30 per faucet. Fixed costs of production are $900,000. Casey sells the faucets for a price of $75 per unit.

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  1. How many faucets must Casey make and sell to break even?
  2. How many faucets must Casey make and sell to earn a $270,000 profit?
  3. The marketing manager believes that sales would increase dramatically if the price were reduced to $66 per unit. How many faucets must Casey make and sell to earn a $270,000 profit, assuming the sales price is set at $66 per unit?

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