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SouthCo is manufacturing a product that it will sell for $120. They have a large infrastructure that is costly to maintain but cheap to run. Their monthly fixed costs are $4,500 and their unit variable costs are $30.
Based on this information, answer the following questions.
For full marks, you should round your number of units to the nearest unit and round your net incomes to the nearest dollar.
a) What is the monthly break-even volume for SouthCo?
# of units = ?
b) What is the net income of SouthCo if unit sales are twice the break-even point for a given month?
Net Income = ?
c) What is the monthly net income of SouthCo if unit sales are 22% above the break-even point?
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