Step 1

Let's say an airplane company has fixed costs of $100 million and variable costs per unit of $2 million. Planes sell for $3 million each. What is the company's breakeven point in terms of the number of planes that need to be sold just to break even?

Step 2 Step 3

If the airplane company wants to make a profit of $99 million annually, how many planes will it have to sell?

If the company can sell 200 airplanes in a year, how much annual profit will the firm make?