Due to new infrastructure projects and changes in city planning A auto parts manufacturing unit is considering the relocation meaning it is moving to a different place. The owner estimates that he would incur a fixed cost of 6000$ per week and the labour, energy and material costs to produce it is moving to a different place. The owner estimates that he would incur a He estimates and the labour, energy material costs to produce cake at that location will be 0.8$. He estimates that the selling price of the cake can be 1.8$.
- What number of auto parts must be sold in order to break even?
- For this new location, What profit or loss would there be on a sale of 22,000 parts per week?
- What number of parts will be required if the owner wants to realize a profit of 10000$.
- Suppose the manufacturer decides to buy a powerful motor of 500$ and a new lathe machine of 500$ which will increase the fixed cost by 1000$ more. As motor and new machine will be added to fixed cost. In this revised scenario what will be impact on break even point and now to earn a profit of 10,000$ how many pieces will be required to sell.