CD Solutions Ltd. manufactures and replicates CDs for software and music recording companies. CD Solutions sells each disc for $4.40. The variable costs per disc are $2.40. a. To just break even, how many CDs must be sold per month if the fixed costs are $54,000 per month? Number of CDs per month b. What must sales be in order to have a profit of $8,900 per month? Sales CDs per month c. What will their profit be if they have total revenue of $145,200 per month? Profit $ per month d. How many CDs would have to be sold per month to break even if they increased their selling price to $5.10 each?
CD Solutions Ltd. manufactures and replicates CDs for software and music recording companies. CD Solutions sells each disc for $4.40. The variable costs per disc are $2.40. a. To just break even, how many CDs must be sold per month if the fixed costs are $54,000 per month? Number of CDs per month b. What must sales be in order to have a profit of $8,900 per month? Sales CDs per month c. What will their profit be if they have total revenue of $145,200 per month? Profit $ per month d. How many CDs would have to be sold per month to break even if they increased their selling price to $5.10 each?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:CD Solutions Ltd. manufactures and
replicates CDs for software and music
recording companies. CD Solutions sells
each disc for $4.40. The variable costs per
disc are $2.40.
a. To just break even, how many CDs must
be sold per month if the fixed costs are
$54,000 per month?
Number of CDs
per month
b. What must sales be in order to have a
profit of $8,900 per month?
Sales
CDs per month
c. What will their profit be if they have total
revenue of $145,200 per month?
Profit
$ per month
d. How many CDs would have to be sold
per month to break even if they increased
their selling price to $5.10 each?
Break even
CDs
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