Problem $19-04$

The manufacturer of a product that has a variable cost of $$1\mathrm{.}90$ per unit and total fixed cost of $$130,000$ wants to determine the level of output necessary to avoid losses.

a$.$ What level of sales is necessary to break$-$even if the product is sold for $$5\mathrm{.}00?$ Round your answer to the nearest whole number.

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What will be the manufacturer's profit or loss on the sales of $87,000$ units? Round your answer to the nearest dollar. $

b$.$ If fixed costs rise to $$187,000,$ what is the new level of sales necessary to break$-$even? Round your answer to the nearest whole number.

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c$.$ If variable costs decline to $$1\mathrm{.}60$ per unit, what is the new level of sales necessary to break$-$even? Round your answer to the nearest whole number.

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d$.$ If fixed costs were to increase to $$187,000,$ while variable costs declined to $$1\mathrm{.}60$ per unit, what is the new break$-$even level of sales? Round your answer to the nearest whole number.

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e$.$ If a major proportion of fixed costs were noncash $($depreciation$),$ would failure to achieve the break$-$even level of sales imply that the firm cannot pay its current obligations as they come due? Suppose $$90,000$ of the above fixed costs of $$130,000$ were depreciation expense. What level of sales would be the cash break$-$even level of sales? Use the initial variable cost in your calculations. Round your answer to the nearest whole number.

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