1.suppose that the demand forecast indicate that 1800 units of the product can be sold. the fixed cost is $3,000, the variable cost is $2 for each unit product and selling price $10 per unit. the decision to produce and sell 1800 units in a projected profit of?
2. what is the break-even point problem 1 if you have the following:
fc=$3,000 selling price per unit=$15 variable cost=$2
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To find the projected profit in problem 1, we need to calculate the total revenue and the total cost.
Total Revenue = Selling Price * Number of Units
Total Revenue = $10 * 1800 = $18,000
Total Cost = Fixed Cost + (Variable Cost * Number of Units)
Total Cost = $3,000 + ($2 * 1800) = $3,000 + $3,600 = $6,600
Projected Profit = Total Revenue - Total Cost
Projected Profit = $18,000 - $6,600 = $11,400
Therefore, the projected profit for selling 1800 units is $11,400.
Now let's move on to problem 2 and calculate the break-even point.
Break-even point is the number of units that need to be sold in order to cover all costs and have zero profit.
Break-even Point (in units) = Fixed Cost / (Selling Price - Variable Cost)
Break-even Point (in units) = $3,000 / ($15 - $2) = $3,000 / $13 = 230.77
Since we cannot produce a fraction of a unit, the break-even point will be rounded up to the nearest whole number.
Therefore, the break-even point in problem 2 is 231 units.