You Have Been Provided with the Following Information Regarding the Omaha

question 66

Essay

You have been provided with the following information regarding the Omaha Manufacturing Company:
$\begin{array}{llr} \text {Sales price } &\$50\\ \text { Variable manufacturing cost per unit } &24\\ \text { Variable marketing cost per unit} &6\\ \text { Fixed manufacturing costs } &360,000\\ \text { Fixed administrative costs} &80,000\\\end{array}$


This information is based on forecasted sales of 30,000 units.
Required:
(a) What is the expected operating profit for the upcoming year?
(b) What is the break-even point in units?
(c) If $180,000 of operating profit is desired, how many units must be sold?

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Definitions:

Complete certainty

A state or condition where all aspects and outcomes are known, with no ambiguity or risk.

Classical decision

A decision-making approach based on rational analysis and choice, often associated with maximizing outcomes using a clear set of preferences and information.

Behavioral decision

Decisions made based on the observation and understanding of the behavior of individuals or groups, often in the context of behavioral economics or psychology.

Uncertain environments

describe situations or contexts in which there is a lack of clear information or predictability, making it difficult to make decisions or plan effectively.