If the product sells for 12 what is the breakeven point in


1. Explain why optimal profits should occur when marginal cost equals marginal revenue.

2. Chambers Company has just gathered estimates for conducting a breakeven analysis for a new product. Variable costs are $7 a unit. The additional plant will cost $48,000. The new product will be charged $18,000 a year for its share of general overhead. Advertising expenditures will be $80,000, and $55,000 will be spent on distribution. If the product sells for $12, what is the breakeven point in units? What is the breakeven point in dollar sales volume?

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