Problem 1 - Revenue and Cost Calculations A manufacturing plant operation has fixed costs of $2,500,000 per year, and its output capacity is 0 - 100,000 electrical appliances per year. When the plant is operating at 100% capacity, the total variable cost is $3,500,000. The product sells for $90 per unit. 1. What is the maximum expected total revenue? 2. What is the variable cost per UNIT? 3. What is the breakeven number of electrical appliances? 4. What is the expected profit if the plant operates at 85% of capacity (85,000 units)? Construct the economic breakeven chart. This should be sketched on paper (do not use Desmos). Label all lines and points of intersection. Include this chart in your upload of supporting work.

Problem 1 - Revenue and Cost Calculations A manufacturing plant operation has fixed costs of $2,500,000 per year, and its output capacity is 0 - 100,000 electrical appliances per year. When the plant is operating at 100% capacity, the total variable cost is $3,500,000. The product sells for $90 per unit. 1. What is the maximum expected total revenue? 2. What is the variable cost per UNIT? 3. What is the breakeven number of electrical appliances? 4. What is the expected profit if the plant operates at 85% of capacity (85,000 units)? Construct the economic breakeven chart. This should be sketched on paper (do not use Desmos). Label all lines and points of intersection. Include this chart in your upload of supporting work.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Problem 1 - Revenue and Cost Calculations
A manufacturing plant operation has fixed costs of $2,500,000 per year,
and its output capacity is 0 - 100,000 electrical appliances per year. When
the plant is operating at 100% capacity, the total variable cost is
$3,500,000. The product sells for $90 per unit.
1. What is the maximum expected total revenue?
2. What is the variable cost per UNIT?
3. What is the breakeven number of electrical appliances?
4. What is the expected profit if the plant operates at 85% of capacity
(85,000 units)?
Construct the economic breakeven chart. This should be sketched on
paper (do not use Desmos). Label all lines and points of intersection.
Include this chart in your upload of supporting work.

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