What is the breakeven level of output for the new tractor

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Myers Implements is attempting to develop and market a new garden tractor. Fixed costs to develop and produce the new tractor are estimated to be $10 mil- lion per year. The variable cost to make each tractor has been estimated at $2,000. The marketing research department has recommended a price of $4,000 per tractor.

a. What is the breakeven level of output for the new tractor?

b. If management expects to generate a target profit of $2 million from the tractor each year, how many tractors must be sold?

Reference no: EM13927319

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