A manufacturing process at Simplicity XP has a fixed cost of $40,000 per month. A total of 100 units can be produced in 1 day at a cost of $3000 for materials and labor for the day. If the company’s MARR is 12% per year, compounded monthly, how many units must be sold each month at $50 per unit for the company to just break even?
A manufacturing process at Simplicity XP has a fixed cost of $40,000 per month. A total of 100 units can be produced in 1 day at a cost of $3000 for materials and labor for the day. If the company’s MARR is 12% per year, compounded monthly, how many units must be sold each month at $50 per unit for the company to just break even?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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A manufacturing process at Simplicity XP has a
fixed cost of $40,000 per month. A total of 100
units can be produced in 1 day at a cost of $3000
for materials and labor for the day. If the company’s
MARR is 12% per year, compounded monthly,
how many units must be sold each month at $50
per unit for the company to just break even?
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