A producer of pottery is considering the addition of a new plant to absorb the backlog of demand that now exists. The primary location being considered will have fixed costs of $9200 per month and variable costs of 70 cents per unit produced. Each item is sold to retailers at a price that averages 90 cents. What is the breakeven point?
A company manufactures a product currently using two machines. Each machine averages 225 units of the product per day. However, annual demand is forecasted to reach 150000 units of product in year 2013. How many machines in total should the company plan to use in order to be able to satisfy demand in the future? Assume 240 workdays per year.