Answer to Question #327760 in Macroeconomics for Hes

Question

7. Elgar Toaster Co. is contemplating a modernization of its antiquated plant. It now sells its

toasters for $20 each; the variable cost per unit is $8, and fixed costs are $840,000 per year.

a. Calculate the break-even quantity.

b. If the proposed modernization is carried out, the new plant would have fixed costs of

$1,200,000 per year, but its variable costs would decrease to $5 per unit.

1. What will be the break-even point now?

2. If the company wanted to break even at the same quantity as with the old plant,

what price would it have to charge for a toaster?

Answer 1

It's been a while since this question is posted here. Still, the answer hasn't been got. Consider converting this question to a fully qualified assignment, and we will try to assist. Please click the link below to proceed: Submit order