O how many units do they need to sell every month to break-even?

Marketing
20th Edition
ISBN:9780357033791
Author:Pride, William M
Publisher:Pride, William M
Chapter19: Pricing Concepts
Section: Chapter Questions
Problem 6DRQ
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#3 - At Freeze Inc. the manufacturing of each air conditioning has a variable cost of $400 per unit and it takes place in a facility that
has a monthly fixed cost of $200,000.
a.
If Freeze Inc. sells each unit at $1,200 how many units do they need to sell every month to break-even?
b.
What is the monthly revenue at the break-even point?
с.
What is the monthly variable cost at the break-even point?
d.
What is the total operating cost at the break-even point?
e. If Freeze Inc. sells 1,000 units at $1,000 each on a given month, calculate the profit.
acer
Transcribed Image Text:#3 - At Freeze Inc. the manufacturing of each air conditioning has a variable cost of $400 per unit and it takes place in a facility that has a monthly fixed cost of $200,000. a. If Freeze Inc. sells each unit at $1,200 how many units do they need to sell every month to break-even? b. What is the monthly revenue at the break-even point? с. What is the monthly variable cost at the break-even point? d. What is the total operating cost at the break-even point? e. If Freeze Inc. sells 1,000 units at $1,000 each on a given month, calculate the profit. acer
Expert Solution
Step 1

Breakeven point(BEP?) indicating the units which cover total cost. BEP specifying no profit nor loss and the Revenue exactly equal to the total cost. Based on the given information, we can calculate the BEP and profit like given below. 

 

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