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At Break-Even Point, a Company Sells 1,200 Widgets

Question 161

Essay

At break-even point, a company sells 1,200 widgets. Its selling price is $6 per widget, variable cost is $2 per widget, and its fixed cost is $4 per widget.
Instructions
If it sells 100 additional widgets, determine the company's incremental profit.

Correct Answer:

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$6(1,200) - $2(1,200) - X = 0
...

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