Reference no: EM132641895
Question - BREAKEVEN ANALYSIS
Squash is a manufacturer of slippers in St. Catherine. A pair of slippers is sold for $3,450 and its variable costs is $1,700 and fixed costs is $12,000,000 annually:
Using the information provided.
a) How many pair of slippers must the company sell in order to break even and what is the breakeven revenue?
b) If the company sold 8,500 pairs of slippers last year. What was its profit?
c) Due to a new lump-sum tax, next year's fixed costs are expected to rise to $15,000,000. What will be the NEW break-even quantity and revenue?
d) If the company will sell the number of units obtained in part (c) and wants to maintain the same profit as last year, what will its new price have to be?
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