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"The manufacturer of a product that has a variable cost of $2.50 per unit and total fixed cost of $125,000 wants to determine the level of output necessary to avoid losses.

a. What level of sales is necessary to break even if the product is sold for $4.25? What will be the manufactories profit or loss on the sales of 100,000 units?

b. If fixed costs rise to $175,000, what is the new level of sales necessary to break even?

c. If variable costs decline to $2.25 per unit, what is the new level of sales necessary to break even?

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M942382

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