Nonlinear breakeven analysis

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Reference no: EM13925377

International Data Systems information on revenue and costs is only relevant up to a sales volume of 105,000 units. After 105,000 units, the market becomes saturated and the price per unit falls from $14.00 to $8.80. Also, there are cost overruns at a production volume of over 105,000 units, and variable cost per unit goes up from $7.00 to $8.00. Fixed costs remain the same at $55,000.

(LO5-2)

a. Compute operating income at 105,000 units.

b. Compute operating income at 205,000 units.

Please show work. Step by step.

Reference no: EM13925377

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