The Weaver Watch Company sells watches for $25, the fixed costs are $140,000, and variable costs are

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The Weaver Watch Company sells watches for $25, the fixed costs are $140,000, and variable costs are $15 per watch.

a. What is the firm’s gain or loss at sales of 8,000 watches? at 18,000 watches?

b. What is the break-even point? Illustrate by means of a chart.

c. What would happen to the break-even point if the selling price was raised to $31? What is the significance of this analysis?

d. What would happen to the break-even point if the selling price was raised to $31 but variable costs rose to $23 a unit?

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Fundamentals of Financial Management

ISBN: 978-0324664553

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Authors: Eugene F. Brigham, Joel F. Houston

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Question Posted: Oct 05, 2011 07:43 AM

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The Weaver Watch Company sells watches for $25, the fixed costs are $140,000, and variable costs are

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a 8000 units 18000 units Sales 200000 450000 Fixed costs 140000 140000 Variable costs 120000 270000 ...View the full answer

Fundamentals of Financial Management

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