15-9B. (Break-even point and operating leverage) Matthew Electronics manufactures a complete line of radio and communication equipment for law enforcement agencies. The average selling price of its finished product is $175 per unit. The variable costs for these same units is $140. Matthew’s incurs fixed costs of $550,000 per year.
1. What is the break-even point in units for the company?
2. What is the dollar sales volume the firm must achieve to reach the break-even point?
3. What would be the firm’s profit or loss at the following units of production sold: 12,000 units? 15,000 units? 20,000 units?