Problem
Heinrich is a manufacturing engineer with the Miller Company. He has determined the costs of producing a new product to be as follows:
Equipment cost: $288,000/year
Equipment salvage value at EOY5 = $41,000
Variable cost per unit of production: $14.55
Overhead cost per year: $48,300
If the Miller Company uses a 5-year planning horizon and the product can be sold for a unit price of $39.75, how many units must be produced and sold each year to break even? Contributed by Paul R. McCright, University of South Florida.
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.