A Firm Has the Following Sales Data for One Month

question 50

Essay

A firm has the following sales data for one month:

a. Find the firm's breakeven quantity.
b. The form is considering a plant modernization proposal from the Manufacturing V- Pres. This proposal increases Fixed Manufacturing Expenses to $27,250 per month but decreases the Variable Manufacturing Expense to $ 6 per unit. Find the firm's new breakeven output if it undertakes this modernization program. Assume all other items remain the same.
c. As an economic consultant to the firm who has been hired to help them evaluate this new modernization, what advice would you have?

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Definitions:

Carl Rogers

An influential American psychologist who founded client-centered therapy and significantly contributed to humanistic psychology.

Empathic

Being capable of recognizing and empathizing with the emotions of someone else.

Growth

An increase in size, number, value, or strength.

Humanistic Psychologists

Psychologists who focus on the individual's innate potential for growth and self-actualization, emphasizing a holistic perspective of human nature.