Question
Gwanak Corporation manufactures desktop watches and sells them for 8,000 won(1 Won= 1), and currently has a monthly production capacity of 40,000 units, with a
Gwanak Corporation manufactures desktop watches and sells them for 8,000 won(1 Won= 1), and currently has a monthly production capacity of 40,000 units, with a fixed cost of 20 million won. It costs 4,000 won to produce one desktop clock.
1. When producing and selling 5,000 units, what is the operating profit of the Gwanak Company?
2. Find a break-even point for the Gwanak company.
3. What would be the break-even point if the selling price had fallen to 7,500 won and the unit's fluctuation cost had been raised to 4,300 won due to rising raw material prices?
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