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A small manufacturing operation can produce up to 250 units per week of a product that it sells for $20 per unit. The variable cost per unit is $12, and the fixed cost per week is $1200. Answer a. How many units must the business sell per week to break even? b. Determine the firms weekly profit or loss if it sells: (i) 120 units per week (ii) 250 units per week c. At what level of sales will the net income be $400 per week?

Answers (Need work shown using: Contribution Margin Approach to CVP analysis):

a) 150 units/week

b) (i) Loss of $240 a week

(ii) Profit of $800 a week

c) 200 units/week

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