Beacon Company Makes a Product That Has a Variable Cost

question 120

Essay

Beacon Company makes a product that has a variable cost of $25 per unit and a selling price of $45 per unit.Annual fixed costs total $860,000.Beacon's net income last year was $240,000.Beacon's management is considering lowering the selling price to $35.
Required:
1)How many units did Beacon sell last year?
2)If Beacon Company wants to maintain the same level of income that it had last year,how many units would it have to sell at the new selling price of $35?

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Definitions:

Subtreasury Plan

A proposal in the late 19th century aiming to revolutionize credit and storage for agricultural products to benefit farmers.

Farmers' Alliances

Late 19th-century movements in the United States that aimed to improve the economic conditions for farmers through the creation of cooperatives and political advocacy.

Stored Crops

Refers to harvested agricultural products that are kept in storage, usually to ensure food supply stability or for selling when market conditions are favorable.

Populist Party

A political party in the United States in the late 19th century that sought to represent the interests of farmers and laborers.