Bazooka Company Is Thinking About Introducing a New Type of Color

question 3

Essay

Bazooka Company is thinking about introducing a new type of color printer. If they introduce it, their factory will incur additional fixed costs of $37,000,000 per year. The variable costs will be $261 per printer.
a) If Bazooka sells the new printer for $819, how many must they sell to break even?
b) If Bazooka sells 70,000 of the new printer at the $819 price, what will the contribution to profit be?

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Definitions:

National Output

The total value of all goods and services produced within a country's borders in a given time period, often referred to as Gross Domestic Product (GDP).

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The part of the economy that is not controlled by the government and is run by individuals and companies for profit.