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Assume a Price Per Unit Equals $100, Fixed Costs Total

Question 220

Essay

Assume a price per unit equals $100, fixed costs total $50 000, and variable costs are $70 per unit.
a. Find the breakeven point (in both units and dollars).
b. Assume a firm wants to earn a profit of $50 000. Find the new breakeven point.

Correct Answer:

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a. Breakeven point (units) = $50 000/($1...

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