Reference no: EM132562079

Question 1. In order to produce a new product, a firm must lease equipment at a cost of $160,000 per year. The managers feel that they can sell 62,000 units per year at a price of $87. What is the highest variable cost that will allow the firm to at least break even on this project? (Round the answer to 2 decimal places.)

Question 2. A manager has determined that a potential new product can be sold at a price of $29.00 each. The cost to produce the product is $21.50, but the equipment necessary for production must be leased for $115,000 per year. What is the break-even point? (Round the answer to the nearest whole number.)

Question 3. In order to produce a new product, a firm must lease equipment at a cost of $35,000 per year. The managers feel that they can sell 6,250 units per year at a price of $20. What is the highest variable cost that will allow the firm to at least break even on this project? (Round the answer to 2 decimal places.)

Question 4. Production has indicated that they can produce widgets at a cost of $8.00 each if they lease new equipment at a cost of $20,000. Marketing has estimated the number of units they can sell at a number of prices (shown below). Which price/volume option will allow the firm to avoid losing money on this project?

a. 4,100 units at $13.00 each.

b. 1,300 units at $23.00 each.

c. 1,600 units at $20.50 each.

d. 2,000 units at $18.00 each.

e. 2,600 units at $15.50 each.

Question 5. A manager has determined that a potential new product can be sold at a price of $51.0 each. The cost to produce the product is $34.0, but the equipment necessary for production must be leased for $110,000 per year. What is the break-even point? (Round the answer to the nearest whole number.)