3 Requlred Informatlon art 1 of 2 You work for Bellevue Window Products. While p

Question

3 Requlred Informatlon art 1 of 2 You work for Bellevue Window Products. While performing an analysis for a new window product, you found a report from last year that provided the following information regarding the manufacture of a similar product annual production rate = 40,000 units; selling price $67 per unit, fixed production cost $285,000 per year variable production cost $1,730.000 per year; and variable selling expenses = $85,000 per year. eBook As a first-cut, you decide to use this information to estimate the breakeven production rate per year. Hint The breakeven production rate per year is estimated to be units peryear

Explanation / Answer

Annual production rate = 40000
Selling price = 67
Variable production cost per unit = 1730000/40000 = 43
F= 285000
Q = F/(P-V) = 285000/(67-43) = 11875

So breakeven production rate per year is estimated to be 11875 units per year

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