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A plant operation has fixed cost of $2,000,000 per year, and its output capacity is 100,000 electrical appliances per year. The variable cost is $70 per unit, and the product sells for $120 per unit.                  a) What is the annual break even volume of this product?            b) Compare annual profit when the plant is operating at 90% capacity with the plant operation at 100% capacity. Assume that the first 90% of capacity output is sold at $120 per unit and that the remaining 10% of production is sold at $100 per unit. Show handwritten solutions

A plant operation has fixed cost of $2,000,000 per year, and its output capacity is 100,000 electrical appliances per year. The variable cost is $70 per unit, and the product sells for $120 per unit.                  a) What is the annual break even volume of this product?            b) Compare annual profit when the plant is operating at 90% capacity with the plant operation at 100% capacity. Assume that the first 90% of capacity output is sold at $120 per unit and that the remaining 10% of production is sold at $100 per unit. Show handwritten solutions

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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A plant operation has fixed cost of $2,000,000 per year, and its output capacity is 100,000 electrical appliances per year. The variable cost is $70 per unit, and the product sells for $120 per unit.                  a) What is the annual break even volume of this product?            b) Compare annual profit when the plant is operating at 90% capacity with the plant operation at 100% capacity. Assume that the first 90% of capacity output is sold at $120 per unit and that the remaining 10% of production is sold at $100 per unit. Show handwritten solutions
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