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XYZ, Inc. manufactures an industrial air compressor. If applicable, show all of your work/calculations to...

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Accounting

XYZ, Inc. manufactures an industrial air compressor. If applicable, show all of your work/calculations to receive full credit.

Based upon a production of 5,000 units, the company data is as follows:

Cost for 5,000 units

Variable materials $100

Variable labor 150

Variable factory overhead 50

Fixed factory overhead 200

Variable marketing costs 50

Fixed marketing costs 140

a. Assuming the units sell for $800, what is the breakeven sales amount in terms of dollars and units? If applicable, show all of your work/calculations to receive full credit.

b. If unit sales could be increased to 5,500 by lowering the price to $750, would the company be better off than it is now (at 5,000 units)? Explain. If applicable, show all of your work/calculations to receive full credit.

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