XYZ, Inc. manufactures an industrial air compressor. If applicable, show all of your work/calculations to...
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Accounting
XYZ, Inc. manufactures an industrial air compressor. If applicable, show all of your work/calculations to receive full credit.
Based upon a production of 5,000 units, the company data is as follows:
Cost for 5,000 units
Variable materials $100
Variable labor 150
Variable factory overhead 50
Fixed factory overhead 200
Variable marketing costs 50
Fixed marketing costs 140
a. Assuming the units sell for $800, what is the breakeven sales amount in terms of dollars and units? If applicable, show all of your work/calculations to receive full credit.
b. If unit sales could be increased to 5,500 by lowering the price to $750, would the company be better off than it is now (at 5,000 units)? Explain. If applicable, show all of your work/calculations to receive full credit.
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