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Management Studies

A producer of pottery is considering the addition of a new plant to absorb the backlog of demand that now exists. The primary location being considered will have fixed costs of $9,200 per month and variable costs of .70 cents per unit produced. Each item is sold to retailers at a price that averages 90 cents.

a. What is the monthly breakeven in units if the price is $.90 each? In revenue?

b. What price must be charged to earn a monthly profit of $5,000 if the forecast is for 100,000 units per month?

c. What volume is needed at a price of $.90 to earn a monthly profit of $5,000?

d. What volume is needed at a price of $.90 to obtain a monthly profit of $.10 per unit?

e. What volume is needed at a price of $.90 to obtain a monthly revenue of $20,000?

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Operation Management, Management Studies

Category:- Operation Management
Reference No.:- M91813817

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