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What is the current break-even point in units

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Question - Jeep Corporation has a current selling price of $41 per unit. The manager ofJeep Corp. is considering raising its current price by15%. If she does so, she estimates that demand will decrease by 18,000 units per month. Jeep currently sells 90,000 units per month, each of which costs $22 in variable costs. Fixed costs are $1,080,000.

a. What is the current pro?t?

b. What is the current break-even point in units?

c. If the manager raises the price, what will pro?t be?

d. If the manager raises the price, what will be the new break-even point in units?

e. Assume the manager does not know how much demand will drop if the price increases. By how much would demand have to drop before the manager would not want to implement the price increase?

Reference no: EM132604636

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