Question

# What is the break-even point in terms of number of finished good units for purchasing another...

What is the break-even point in terms of number of finished good units for purchasing another machine at Station #3 if the projected selling price is \$224 per finished good unit? For variable cost, use only the raw material cost and no interest or other costs.

Machine price: \$142,500

Inventory: Delivered every 4 days, \$50 per unit, \$1000 per order

Given that, Seling price = SP = \$224 per unit

Fixed cost = \$142,500

Variable cost per unit = \$50 per unit

Let the Breakeven quantity = P

In the condition of Breakeven,

Total Revenue = Total cost

Selling price per unit x Quantity = Fixed cost + (Variable cost per unit x Quantity)

224P = 142500 + 50P

174P = 142500

P = Breakeven Quanity = 818.96 Units or 819 Units (Approx.)

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