A company that manufactures automatic blowdown control valves (for applications where boilers are operated unsupervised for 24 to 36 hours) has fixed cost of $160,000 per year and variable cost of $400 per valve. If the company expects to sell 12,000 valves per year, determine the selling price in order for the company to (a) break even, and (b) make a profit of $400,000 per year.
A company that manufactures automatic blowdown control valves (for applications where boilers are operated unsupervised for 24 to 36 hours) has fixed cost of $160,000 per year and variable cost of $400 per valve. If the company expects to sell 12,000 valves per year, determine the selling price in order for the company to (a) break even, and (b) make a profit of $400,000 per year.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
A company that manufactures automatic blowdown
control valves (for applications where
boilers are operated unsupervised for 24 to
36 hours) has fixed cost of $160,000 per year
and variable cost of $400 per valve. If the
company expects to sell 12,000 valves per year,
determine the selling price in order for the company
to (a) break even, and (b) make a profit of
$400,000 per year.
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