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Management believes it can sell a new product for $9.00. The fixed costs of production are estimated to be $6,000, and the variable costs are

Management believes it can sell a new product for $9.00. The fixed costs of production are estimated to be $6,000, and the variable costs are $4.00 a unit.

  1. Complete the following table at the given levels of output and the relationships between quantity and fixed costs, quantity and variable costs, and quantity and total costs. Round your answers to the nearest dollar. Enter zero if necessary. Use a minus sign to enter losses, if any.

    Quantity Total Revenue Variable Costs Fixed Costs Total Costs Profits (Losses)
    0 $ $ $ $ $
    500 $ $ $ $ $
    1,000 $ $ $ $ $
    1,500 $ $ $ $ $
    2,000 $ $ $ $ $
    2,500 $ $ $ $ $
    3,000 $ $ $ $ $

  2. Determine the break-even level using the above table and use the Exhibit 19.5to confirm the break-even level of output. Round your answers for the break-even level to the nearest whole number. Round your answers for the fixed costs, variable costs, total costs, and profits (losses) to the nearest dollar. Enter zero if necessary. Use a minus sign to enter losses, if any.

    Quantity Total Revenue Variable Costs Fixed Costs Total Costs Profits (Losses)
    $ $ $ $ $

  3. What would happen to the total revenue schedule, the total cost schedule, and the break-even level of output if management determined that fixed costs would be $11,000 instead of $6,000? Round your answer for the break-even level of output to the nearest whole number.

    If fixed costs were $11,000 instead of $6,000 the total revenue schedule -Select-increasesdecreasesdoes not changeItem 42 and the total cost schedule -Select-increasesdecreasesdoes not changeItem 43 .

    The new break-even level of output is units.


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