Costs of producing a new product

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Reference no: EM131807869

Heinrich is a manufacturing engineer with the Miller Company. He has determined the costs of producing a new product to be as follows:

Equipment cost: $288,000/year

Equipment salvage value at EOY5 = $41,000

Variable cost per unit of production: $14.55

Overhead cost per year: $48,300

If the Miller Company uses a 5-year planning horizon and the product can be sold for a unit price of $39.75, how many units must be produced and sold each year to break even? Contributed by Paul R. McCright, University of South Florida

Reference no: EM131807869

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