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Question - Cost-volume-profit relationship - Perez Corporation is a manufacturing company that makes small electric motors it sells for $38 per unit. The variable costs of production are $26 per motor, and annual fixed costs of production are $240,000.
Required -
a. How many units of product must Perez make and sell to break even?
b. How many units of product must Perez make and sell to earn a $72,000 profit?
c. The marketing manager believes that sales would increase dramatically if the price were reduced to $34 per unit. How many units of product must Perez make and sell to earn a $93600 profit, if the sales price is set at $34 per unit?
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