document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=277913>Question 277913</A>: <I><SPAN STYLE=\"word-break: break-all;\"> (Break-even point and operating leverage) Allison Radios manufactures a complete line of radio and communication equipment for law enforcement agencies. The average selling price of its finished product is $180 per unit. The variable cost for these same units is $126. Allison<BR>\n" );
document.write( "Radios incur fixed costs of $540,000 per year.<BR>\n" );
document.write( "$54 is the answer.\r<BR>\n" );
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document.write( "What would be the firm’s profit or loss at the following units of production sold:<BR>\n" );
document.write( "12,000 units? 15,000 units? 20,000 units?<BR>\n" );
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document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #202290 by </B><A HREF=/tutors/aboutme.mpl?userid=ankor@dixie-net.com><B>ankor@dixie-net.com(22740)</B></A><img src=\"/images/stars/stars-13.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=ankor@dixie-net.com><IMG SRC=http://www.algebra.com/images/aboutme-small.gif BORDER=0 alt=\"About Me\" VALIGN=MIDDLE></A>&nbsp;<IMG SRC=http://www.algebra.com/cgi-bin/show-face.mpl?user=ankor@dixie-net.com><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=202290\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> Complete line of radio and communication equipment for law enforcement agencies. The average selling price of its finished product is $180 per unit. The variable cost for these same units is $126. Allison<BR>\n" );
document.write( "Radios incur fixed costs of $540,000 per year.<BR>\n" );
document.write( "$54 is the answer.<BR>\n" );
document.write( ":<BR>\n" );
document.write( "What would be the firm’s profit or loss at the following units of production sold:<BR>\n" );
document.write( "12,000 units? 15,000 units? 20,000 units?<BR>\n" );
document.write( ":<BR>\n" );
document.write( "Rev = 180x<BR>\n" );
document.write( "Cost = 126x + 540000<BR>\n" );
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document.write( "Profit = Rev - Cost<BR>\n" );
document.write( "P = 180x - (126x + 540000)<BR>\n" );
document.write( "When x = 12000 units<BR>\n" );
document.write( "P = 180(12000) - (126(12000) + 540000)<BR>\n" );
document.write( "P = 2160000 - 1512000 - 540000<BR>\n" );
document.write( "P = $108,000 profit<BR>\n" );
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document.write( "When x = 15000 units, do same as above\r<BR>\n" );
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document.write( "D </SPAN>\n" );
document.write( "</TD></TR></TABLE>\n" );