Refer to step-by-step.
Step-by-step explanation:
Fixed Cost Per Deck = Total Fixed Cost/Estimated Deck Sales
Fixed Cost Per Deck = 85000/13000
Fixed Cost Per Deck = $7.08
Break Even Point in Units = Fixed Costs/ Sales Price per Unit - Variable Cost
Break Even Point in Units = 85000/11.95 - 3
Break Even Point in Units = 9497
Fixed Cost Per Deck = Total Fixed Cost/Estimated Deck Sales
Fixed Cost Per Deck = 85000/10000
Fixed Cost Per Deck = $8.50
Break Even Point in Units = Fixed Costs/ Sales Price per Unit - Variable Cost
Break Even Point in Units = 85000/12.95 - 3
Break Even Point in Units = 8543
Break Even Point in Units = Fixed Costs/ Sales Price per Unit - Variable Cost
Break Even Point in Units = 85000/13.45 - 3
Break Even Point in Units = 8134
1.Total Cost = Variable Cost/unit x Units Produced + Fixed cost
Total Cost = (3 x 13000) + 85000
Total Cost = 39000 + 85000
Total Cost = $124000
2.Total Cost = Variable Cost/unit x Units Produced + Fixed cost
Total Cost = (3 x 10000) + 85000
Total Cost = 30000 + 85000
Total Cost = $115000
3. $12.95 and $13.45.
Because the total cost is greater than the revenue.
Let's try at $12.95:
Revenue = 12.95 x 8000
Revenue = $103600
Total Cost = (3 x 8000) + 85000
Total Cost = 24000 + 85000
Total Cost = $109000
Profit = Revenue - Total Cost
Profit = 103600 - 109000
Profit = $-5400
Now at $13.45:
Revenue = 13.45 x 7000
Revenue = $94150
Total Cost = (3 x 7000) + 85000
Total Cost = 21000 + 85000
Total Cost = $106000
Profit = Revenue - Total Cost
Profit = 94150 - 106000
Profit = $-11850
4. The fixed costs to produce $13.45 decks is so much greater than the fixed costs to produce 10.95 due to the estimated deck sales.
