A manufacturing company leases for $100,000 per yr a building that houses its manufacturing facilities. In addition the machinery in the building is being paid for installments of $20,000 per year. Each unit of product produced costs $15 in labor and $10 in materials and can be sold for $50. a) How many units per year must be sold for the company to break even? b) If the selling price is lowered to $45 per unit how many units must be sold each year for the company to earn a profit of $80,000 per year?

A manufacturing company leases for $100,000 per yr a building that houses its manufacturing facilities. In addition the machinery in the building is being paid for installments of $20,000 per year. Each unit of product produced costs $15 in labor and $10 in materials and can be sold for $50. a) How many units per year must be sold for the company to break even? b) If the selling price is lowered to $45 per unit how many units must be sold each year for the company to earn a profit of $80,000 per year?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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