Chambers Company has just gathered estimates forconducting a break-even analysis for a new product.Variable costs are $7 a unit. The additional plant willcost $48,000. The new product will be charged $18,000a year for its share of general overhead. Advertisingexpenditures will be $80,000, and $55,000 will be spenton distribution. If the product sells for $12, what is thebreak even point in units? What is the break even pointin dollar sales volume?
Chambers Company has just gathered estimates forconducting a break-even analysis for a new product.Variable costs are $7 a unit. The additional plant willcost $48,000. The new product will be charged $18,000a year for its share of general overhead. Advertisingexpenditures will be $80,000, and $55,000 will be spenton distribution. If the product sells for $12, what is thebreak even point in units? What is the break even pointin dollar sales volume?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Chambers Company has just gathered estimates for
conducting a break-even analysis for a new product.
Variable costs are $7 a unit. The additional plant will
cost $48,000. The new product will be charged $18,000
a year for its share of general overhead. Advertising
expenditures will be $80,000, and $55,000 will be spent
on distribution. If the product sells for $12, what is the
break even point in units? What is the break even point
in dollar sales volume?
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