RSE Corporation Sells Its Product for $10 Per Unit

question 36

Essay

RSE Corporation sells its product for $10 per unit. Its variable cost is $3 per unit and total fixed costs are $700. Calculate the following:
a)Breakeven sales in units
b)Margin of safety in units if RSE sells 150 units
c)Margin of safety in revenues if RSE sells 200 units
d)Estimated income or loss if RSE sells 75 units

---

Definitions:

Implicit Costs

Non-direct payments or out-of-pocket costs, representing the opportunity costs of using resources owned by the firm for its own use.

Explicit Costs

Payments made directly to individuals or entities for business operations, including salaries, leasing costs, and supplies.

Implicit Costs

The opportunity costs of using resources that a firm already owns, rather than the expenses directly paid out.

Explicit Costs

Direct, out-of-pocket expenses incurred by a firm or individual for business operations or activities.