18 Oct 2020
A producer of chairs 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 $9000 per month and a variable costs of 60 cents per unit produced. Each item is sold to the retailers at a price that averages 88 cents per unit.
a. What volume per month is required to break even?
b. What profit would be realized on a monthly volume of 65000 units?
c. What volume is needed to obtain a profit of $15000 per month?
d. What volume is needed to provide a revenue of $23000 per month