A financial analyst is studying two packaging systems, basic and Deluxe, the basic system has variable operating costs of $ 6 per unit and annual costs of $ 600,000 in contrast the Delux system has variable costs of $ 3 and committed cost of $ 800,000 the company sells the products for $ 40 per unit subject to a 10 percent sales commission , Ignor tax
- A which of the two system will be more profitable for the firm if sales are expected to average 120,000 units per year
- B how many units must the company sell to break even if it selects the Delux system
- C at what volum level will management be indifferent to the basicsystem and the Delux system