The Weaver Watch Company sells watches for $22, the fixed costs are $190,000, an

Question

The Weaver Watch Company sells watches for $22, the fixed costs are $190,000, and variable costs are $13 per watch.

1. What is the firm's gain or loss at sales of 8,000 watches? Enter loss (if any) as negative value. Round your answer to the nearest cent.

$__________________

2. What is the firm's gain or loss at sales of 16,000 watches? Enter loss (if any) as negative
value. Round your answer to the nearest cent.

$___________________

4. What is the break-even point? Round your answer to the nearest whole.

__________units

5. What would happen to the break-even point if the selling price was raised to $33 but variable costs rose to $20 a unit? Round your answer to the nearest whole.

____________units

Explanation / Answer

1. What is the firm's gain or loss at sales of 8,000 watches? Enter loss (if any) as negative value. Round your answer to the nearest cent. 8000*22-8000*13-190000 = -118000 answer 2. What is the firm's gain or loss at sales of 16,000 watches? Enter loss (if any) as negative value. Round your answer to the nearest cent. 16000*22-16000*13-190000 = -46000answer 4. What is the break-even point? Round your answer to the nearest whole. Let the break even quantitiy be X X*22 = X*13 + 190000 solving for X = 21111 units answer 5. What would happen to the break-even point if the selling price was raised to $33 but variable costs rose to $20 a unit? Round your answer to the nearest whole. Let the break even quantitiy be X X*33 = X*20 + 190000 solving for X = 14615 units answer

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