A manufacturing company leases a building for $100,000 per year for its manufacturing facilities. In addition, the machinery in this building is being paid for in installments of $20,000 per year. Each unit of the product produced costs $15 in labor and $10 in materials. The product can be sold for $40. what are the following 1. How many units per year must be sold for the company to breakeven? 2. If 10,000 units per year are sold, what is the annual profit? 3. If the selling price is lowered to $35 per unit, how many units must be sold each year for the company to earn a profit of $60,000 per year?

A manufacturing company leases a building for $100,000 per year for its manufacturing facilities. In addition, the machinery in this building is being paid for in installments of $20,000 per year. Each unit of the product produced costs $15 in labor and $10 in materials. The product can be sold for $40. what are the following 1. How many units per year must be sold for the company to breakeven? 2. If 10,000 units per year are sold, what is the annual profit? 3. If the selling price is lowered to $35 per unit, how many units must be sold each year for the company to earn a profit of $60,000 per year?

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter17: Long-term Investment Analysis

Section: Chapter Questions

Problem 2E

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