The Automotive Supply Company has a small plant that produces speedometers exclusively. Its annual fixed costs are $30,000, and its variable costs are $10/unit. It can sell a speedometer for $25.
A. How many speedometers must the company sell to break even?
B. What is the break-even revenue?
C. The company sold 3,000 units last year. What was its profit?
D. Next year’s fixed costs are expected to rise to $37,500. What will be the break-even quantity?
E. If the company will sell the number of units obtained in the previous question (number 11) and wants to maintain the same profit as last year, what will its new price need to be? Round your answer to the nearest whole number.