A Small Firm Builds Galvanized Swing Sets

question 3

Short Answer

A small firm builds galvanized swing sets. The investment in plant and equipment is $200,000. The variable cost per swing set is $500. The selling price of the swing set is $1000. How many swing sets would have to be sold for the firm to break even?

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Definitions:

Lost Sale

A situation where a business misses the opportunity to sell a product or service due to stockouts, mismatched pricing, or other sales process failures.

Markdowns

Reductions from the original or retail price of goods, typically used to clear out inventory and stimulate sales.

New Car Models

The latest vehicles introduced by manufacturers that often include updated features, technologies, and designs.

Dealers

Entities that buy products from manufacturers or wholesalers to then sell to consumers or other businesses.