A plant has a capacity of 4,100 hydraulic pumps per month. The fixed cost is $504,000 per month. The variable cost is $166 per pump, and the sales price is $328 per pump. (Assume that sales equal output volume.) What is the breakeven point in number of pumps per month? What percentage reduction will occur in the breakeven point if fixed costs are reduced by 18% and unit variable costs by 6%?

A plant has a capacity of 4,100 hydraulic pumps per month. The fixed cost is $504,000 per month. The variable cost is $166 per pump, and the sales price is $328 per pump. (Assume that sales equal output volume.) What is the breakeven point in number of pumps per month? What percentage reduction will occur in the breakeven point if fixed costs are reduced by 18% and unit variable costs by 6%?

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter3: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 7EA: Flanders Manufacturing is considering purchasing a new machine that will reduce variable costs per...

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