A Firm Produces Three Products in a Repetitive Process Facility

question 199

Essay

A firm produces three products in a repetitive process facility. Product A sells for $60; its variable costs are $20. Product B sells for $200; its variable costs are $80. Product C sells for $25; its variable costs are $15. The firm has annual fixed costs of $320,000. Last year, the firm sold 1000 units of A, 2000 units of B, and 10,000 units of C. Calculate the break-even point of the firm. The firm has some idle capacity at these volumes, and chooses to cut the selling price of A from $60 to $45, believing that its sales volume will rise from 1000 units to 2500 units. What is the revised break-even point?

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Definitions:

Common Form

A general or widespread type or style, often referring to documents or artworks that adhere to standard or customary formats and presentations.

Malleus

A small bone in the middle ear that plays a key role in the process of hearing by transmitting sound vibrations from the eardrum to the inner ear.

Incus

A small anvil-shaped bone in the middle ear that plays a crucial role in transmitting sound vibrations to the inner ear.

Red-green Color Blindness

A common type of color vision deficiency where individuals have difficulty distinguishing between red and green hues.