Reference no: EM133006686
Question - Darwin Nursery manufactures and sells pots. Currently, 250,000 units are sold per year at $3.20 per unit. Fixed costs are $190,000 per year. Variable costs are $1.30 per unit.
Required -
a. What is the current annual profit?
b. What is the present break-even point in revenues?
Calculate the new profit for each of the following changes:
c. a $0.30 per unit increase in variable costs
d. a 7% increase in fixed costs and a 7% increase in units sold
e. a 12% decrease in fixed costs, a 12% decrease in selling price, a 12% decrease in variable cost per unit and a 30% increase in units sold
f. Calculate the new break-even point in units for each of the following changes: f. a 10% increase in fixed costs.
g. a 10% increase in selling price and a $20 000 increase in fixed costs.
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