A Manufacturing Company Is Studying the Feasibility of Producing a New

Multiple Choice

A manufacturing company is studying the feasibility of producing a new product. The selling price is expected to be $75. The new production line would manufacture up to 150,000 units at a variable cost of $47 per unit. Fixed costs would be $975,000. Variable selling and administration expenses would amount to $15. Determine the break-even point as a percent of capacity.

A) 30%
B) 40%
C) 50%
D) 60%
E) 70%