Question
Suppose that you work at a clock manufacturing plant. The plant has fixed capital equipment and other overhead costs of $200,000. The variable costs include
Suppose that you work at a clock manufacturing plant. The plant has fixed capital equipment and other overhead costs of $200,000. The variable costs include labor and parts. Each clock requires an average cost of $10 per clock. Doing some basic market research, the company believes that it can sell each clock for $50. Your boss has asked you to determine the break-even quantity. (Please answer both parts A & B and show your work. Just a numerical answer will NOT yield full credit.) A) Using the above data, please determine what the break-even quantity is B) Break-even analysis is a short-cut What important information is it leaving out? Please explain why that information is important.
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