Our team is hired by Apple to help assess whether or not to continue to manufacture and sell an older model of the iPhone. Apple explains that this model continues to sell well in foreign markets but it worries that fixed costs are so large that it is difficult to earn a profit. The Tableau Dashboard is provided to aid our analysis of this model.

Total Fixed Costs

Factory rent expense: $10,250,000

Production manager salaries: $8,500,000

Insurance expense: $6,000,000

Equipment depreciation expense: $5,350,000

Advertising expense: $5,000,000

Variable Costs Per Unit

Battery: $10

Camera: $45

Internal Components: $45

Receiver: $35

Screen: $95

Speaker: $25

Sales Price Per Unit (iPhone): $750

1. Compute break-even point in units. Choose Numerator: Choose Denominator: Break-Even Units Break-even units = 2. Compute the units of product that must be sold to earn pretax income of $9,000,000. Choose Numerator: Choose Denominator: = Units to Achieve Target Units to achieve target 3. Compute the dolar value of sales (revenue) that must be sold to earn pretax income of $9,000,000. Choose Numerator: Choose Denominator: Break-Even Dollars Break-even dollars