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Dmitriy789 [7]
3 years ago
10

In order to produce a new product, a firm must lease equipment at a cost of $100,000 per year. The managers feel that they can s

ell 50,000 units per year at a price of $75. What is the highest variable cost that will allow the firm to at least break even on this project
Business
1 answer:
bezimeni [28]3 years ago
5 0

Answer:

$73 = unitary variable cost

Explanation:

<u>To calculate the unitary variable cost that will yield the break-even point, we need to use the following formula:</u>

Break-even point in units= fixed costs/ contribution margin per unit

50,000= 100,000 / (75 - unitary variable cost)

3,750,000 - 50,000unitary variable cost= 100,000

3,650,000 = 50,000unitary variable cost

$73 = unitary variable cost

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