### Illustrate what would be total revenue at break-even point

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##### Reference no: EM13121770

Q. Crazy Crafters is a manufacturer of furniture items. The company is considering the possibility of offering a new coffee table that would sell for \$415 each. Cost to manufacture these coffee tables comprises \$135 in materials and \$80 in direct labour for each coffee table. Variable marketing and selling costs would be \$25 each. In order to manufacture these coffee tables, the company would need to incur \$525,000 in fixed costs for new equipment.

a. Calculate the break-even point of the coffee tables in units sold.

b. Illustrate what would be the total revenue at the break-even point?

c. Explain how many units would Crazy Crafters need to sell to earn a profit of \$157,500?

d. If fixed costs in fact are \$595,000 rather than \$525,000, explain how many units would need to be sold in order to earn \$157,500?

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