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A company invests $17,000 to produce a product that will sell for $48.70. Each unit costs $7.40 to produce. (Round your answers to the nearest whole number.)

A company invests 17000 to produce a product that will sell for 4870 Each unit costs 740 to produce Round your answers to the nearest whole number class=

Respuesta :

sqdancefan

9514 1404 393

Answer:

 (a) 412

 (b) 3196

Step-by-step explanation:

(a)

The contribution margin of each unit is $48.70 -7.40 = $41.30. The number of units required to cover the investment cost is ...

  $17,000/($41.30/unit) = 411.62 units ≈ 412 units

The company must sell 412 units to break even.

__

(b)

The number of units required to cover the investment and produce a profit of $115,000 is ...

  ($17,000 +115,000)/($43.10/unit) = 3196.13 units ≈ 3196 units

The company must sell 3196 units to make a profit of $115,000.

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