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A new piece of equipment will have a fixed cost of $250,000 and the product it...

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Question

General Management

A new piece of equipment will have a fixed cost of $250,000 andthe product it would produce has a variable cost of $22.50, and aselling price of $35.

A. What is the break-even point?

B. How many units must be sold to make a profit of $750,000?

C. How many units must be sold to average $0.50 profit per unit?$0.75 profit per unit? And $2.50 per unit?

D. If investors expect a 15% Return on Investment (ROI), howmany units must be sold to achieve this goal?

Answer & Explanation Solved by verified expert
3.8 Ratings (437 Votes)
A Contribution per unit Selling price per unit Variable costs per unit 35 2250 1250 per unit Breakeven point in units Fixed costs Contribution per unit 250000 1250    See Answer
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