Reference no: EM131761543

Question - Will you please help me with this problem? Please show the work so that I can understand it.

Please use the following data from XYZ, Inc. manufacturer of an industrial air compressor to answer the questions below:

Based upon a production of 5,000 units, the company data is as follows:

Cost for 5,000 Units

Variable materials............................................................          $100

Variable labor............................................................................... $150

Variable factory overhead........................................................... $50

Fixed factory overhead..........................................................     $200

Variable marketing costs........................................................   $50

Fixed marketing costs............................................................     $140

a)  Assuming the units sell for $800, what is the breakeven sales amount in terms of dollars and units?

b) If unit sales could be increased to 5,500 by lowering the price to $750, would the company be better off than it is now (at 5,000 units)? Explain.