Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Problem 14.06 (Break-Even Analysis) Question 4 of 10 Check My Work (1 remaining) eBook The Warren Watch Company sells watches for $20, fixed costs
Problem 14.06 (Break-Even Analysis) Question 4 of 10 Check My Work (1 remaining) eBook The Warren Watch Company sells watches for $20, fixed costs are $130,000, and variable costs are $11 per watch. a. What is the firm's gain or loss at sales of 8,000 watches? Loss, if any, should be indicated by a minus sign. Round your answer to the nearest cent. 38,000 What is the firm's gain or loss at sales of 15,000 watches? Loss, if any, should be indicated by a minus sign. Round your answer to the nearest cent. $ 35,000 b. What is the break-even point (unit sales)? Round your answer to the nearest whole number. 14,444 units c. What would happen to the break-even point if the selling price was raised to $33? The result is that the break-even point remains unchanged. d. What would happen to the break-even point if the selling price was raised to $33 but variable costs rose to $25 a unit? Round your answer to the nearest whole number. The result is that the break-even point increases.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started