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?

---

Definitions:

Mitral Valve Prolapse

A condition where the valve between the heart's left upper chamber and left lower chamber doesn't close properly.

Heart Valve

Structures within the heart that open and close to control the flow of blood between the chambers of the heart and into the arteries.

Floppy

Pertaining to or characteristic of a floppy disk or flexible nature; often used to describe a state of lacking rigidity.

Cardiac Arrest

An abrupt loss of heart function, breathing, and consciousness, typically resulting from an electrical disturbance in the heart.