Fellwell is a company producing flight safety parachutes for drones. The cost of producing aparachute can be breakdown into fixed cost of $50000 per year and variable cost of $200 perparachute.(a)Explain how gross profit from selling parachute can be computed.(b)If the company sold the parachute harness at $300 per harness, what is the minimumsales quantity per month for the company to break even?(c)If the company decides to sell the harness at $450 per harness, what is the minimumsales quantity per month to break even?(d)What are the factors that affect whether the company could price its parachute harnessat $450 instead of $300?

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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