A plant operation has fixed costs of $1,000,000 per year, and its output capacity is 100,000 electrical appliances per year. The variable cost is $50 per unit, and the product sells for $75 per unit. a. Construct the economic breakeven chart. b. Compare annual profit when the plant is operating at 70% of capacity with the plant operation at 100% capacity. Assume that the first 70% of capacity output is sold at $75 per unit and that the remaining 30% of production is sold at $65 per unit. properly label your lines. Use the point drawing tool to plot the Breakeven point. Be sure to properly label the point. Cost and Revenue, $ 10,000,000- 9,000,000 8,000,000 7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 0 20,000 ... 40,000 60,000 PALA 80,000 100,000 E
A plant operation has fixed costs of $1,000,000 per year, and its output capacity is 100,000 electrical appliances per year. The variable cost is $50 per unit, and the product sells for $75 per unit. a. Construct the economic breakeven chart. b. Compare annual profit when the plant is operating at 70% of capacity with the plant operation at 100% capacity. Assume that the first 70% of capacity output is sold at $75 per unit and that the remaining 30% of production is sold at $65 per unit. properly label your lines. Use the point drawing tool to plot the Breakeven point. Be sure to properly label the point. Cost and Revenue, $ 10,000,000- 9,000,000 8,000,000 7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 0 20,000 ... 40,000 60,000 PALA 80,000 100,000 E
Chapter1: Making Economics Decisions
Section: Chapter Questions
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Transcribed Image Text:A plant operation has fixed costs of $1,000,000 per year, and its output capacity is 100,000 electrical appliances per
year. The variable cost is $50 per unit, and the product sells for $75 per unit.
a. Construct the economic breakeven chart.
b. Compare annual profit when the plant is operating at 70% of capacity with the plant operation at 100% capacity.
Assume that the first 70% of capacity output is sold at $75 per unit and that the remaining 30% of production is sold at
$65 per unit.
properly label your lines.
Use the point drawing tool to plot the Breakeven point. Be sure to properly label the point.
Cost and Revenue, $
10,000,000-
9,000,000-
8,000,000
7,000,000-
6,000,000-
5,000,000
4,000,000
3,000,000
2,000,000
1,000,000-
0+
0
20,000
40,000
60,000
80,000
100,000
Q
Q
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