The fixed cost related to the production of a product is $500,000 per year. Assume that the variable cost is $20,000 and the sell- ing price is $30,000 for each percentage point of annual output capacity (which equals sales demand). Thus, the maximum sales per year are * $3,000,000 (at 100% of output capacity), and we have: (2.3)

The fixed cost related to the production of a product is $500,000 per year. Assume that the variable cost is $20,000 and the sell- ing price is $30,000 for each percentage point of annual output capacity (which equals sales demand). Thus, the maximum sales per year are * $3,000,000 (at 100% of output capacity), and we have: (2.3)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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