Calculate break-even level of output

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Reference no: EM132195849

Suppose a company has a fixed cost of $140,000 and a variable cost per unit of $9. It sells its product for $14.

a. Calculate its break-even level of output.

b. Calculate how much it must produce to make $145,000, assuming it can sell it all.

Extra credit – 15 points. If it can outsource, and buy the product wholesale from a distributor at $11 each, over what level of output should it buy from the wholesaler, and over what level should it produce on its own?

Reference no: EM132195849

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