Essay
A small business owner is contemplating the addition of another product line.Capacity increases and equipment will result in an increase in annual fixed costs of $50,000.Variable costs will be $25 per unit.
(i)What unit selling price must the owner obtain to break-even on a volume of 2,500 units a year?
(ii)Because of market conditions,the owner feels a revenue of $47 is preferred to the value determined in part a.What volume of output will be required to achieve a profit of $16,000 using this revenue?
Correct Answer:
Verified
Correct Answer:
Verified
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