International data systems information on revenue

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Reference no: EM131859768

International Data Systems information on revenue and costs is only relevant up to a sales volume of 106,000 units. After 106,000 units, the market becomes saturated and the price per unit falls from $16.00 to $9.80. Also, there are cost overruns at a production volume of over 106,000 units, and variable cost per unit goes up from $8.00 to $8.50. Fixed costs remain the same at $56,000.

a. Compute operating income at 106,000 units.

b. Compute operating income at 206,000 units.

Reference no: EM131859768

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