Break-even analysis
The Warren Watch Company sells watches for $25, fixed costs are $115,000, and variable costs are $11 per watch.
What is the firm's gain or loss at sales of 5,000 watches? Enter loss (if any) as negative value. Round your answer to the nearest cent.
$ ---------
What is the firm's gain or loss at sales of 20,000 watches? Enter loss (if any) as negative value. Round your answer to the nearest cent.
$ -----
What is the break-even point (unit sales)? Round your answer to the nearest whole.
---------- units
What would happen to the break-even point if the selling price was raised to $34? Select ONE of the following
a. The result is that the break even point is lower.
b. The result is that the break even point is higher.
c. The result is that the break even point remains unchanged
What would happen to the break-even point if the selling price was raised to $34 but variable costs rose to $26 a unit? Round your answer to the nearest whole. Select ONE of the following:
a. The result is that the break even point increases
b. The result is that the break even point decreases
c. The result is that the break even point remains unchanged