1. Due to new infrastructure projects and changes in city planning, A auto par manufacturing unit iw considering the relocation meaning it is moving to a different place. The owner estimates that he would incur a fixed cost of 6000s per week and the labour, energy and material costs to produce cake at that location will be 0.85.He estimates that the selling price of the auto part can be 1.8S. (12 marks- 3 marks for each sub question)
1. What number of auto parts must be sold in order to break even?
2. For this new location ,What profit or loss would there be on a sale of 22,000 parts per week
3. What number of parts will be required if the owner wants to realize a profit of 1000$ .
4. Suppose the manufacturer decides to buy a powerful motor of 500$ and a new lathe machine of 500$ which will increase the fixed cost by 1000$ more. As motor and new machine will be added to fixed cost. in this revised scenario what will be impact on break even point and now to earn a profit of 10,000$ how many pieces will be required to sell.