Answer
(a)
Break even occurs when Total revenue = Total Cost or we can say that profit = Total Revenue - Total Cost = 0.
Total Cost(TC) = Total Fixed Cost + Per unit Variable cost*Q
where Total Fixed Cost = 850,000 , Per unit variable cost = 2075 and Q = Quantity
=> Total Cost = Total Fixed Cost + Per unit Variable cost*Q
=> Total Cost = 850,000 + 2075Q
Total Revenue = Price *Quantity = 3050Q
Hence, Total Revenue = Total Cost => 3050Q = 850,000 + 2075Q
=> 975Q = 850,000
=> Q = 871.795 units or (872 units approx)
(b)
Profit = Total Revenue - Total Cost
=> Profit = 3050Q - (850,000 + 2075Q)
Now it is given that Q = 3000.
Profit = Total Revenue - Total Cost = 3050*3000 - (850,000 + 2075*3000)
=> Profit = $2,075,000.
Handheld fi ber-optic meters with white light po- larization interferometry are useful for measuring temperature, pressure,...
handheld fiber optic meters with white light polarization interferometry are useful for measuring temperature, pressure, and strain in electrically noisy environments. the fixed costs associated with manufacturing are $750000 per year. if variable costs are 290 per unit and the company sells 4200 units per year, at what selling price per unit will the company break even?
Handheld fiber optic meters with white light polarization interferometry are useful for measuring temperature, pressure, and strain in electrically noisy environments. The fixed costs associated with manufacturing are $705,000 per year. If variable costs are $290 per unit and the company sells 4400 units per year, at what selling price per unit will the company break even? The selling price at which the company will break even is determined to be $_____ per unit.
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