A firm makes and sells a computer for $1000. The variable cost to produce a comp

Question

A firm makes and sells a computer for $1000. The variable cost to produce a computer, for the range of production of the firm, is $3000 per unit. The total fixed costs per year to make the computer are $4.0 million. How many computers must be made and sold, given this information, before the firm makes a profit ? How many must be made and sold to earn a $1 million pretax profit? A firm makes and sells a computer for $1000. The variable cost to produce a computer, for the range of production of the firm, is $3000 per unit. The total fixed costs per year to make the computer are $4.0 million. How many computers must be made and sold, given this information, before the firm makes a profit ? How many must be made and sold to earn a $1 million pretax profit? A firm makes and sells a computer for $1000. The variable cost to produce a computer, for the range of production of the firm, is $3000 per unit. The total fixed costs per year to make the computer are $4.0 million. How many computers must be made and sold, given this information, before the firm makes a profit ? How many must be made and sold to earn a $1 million pretax profit?

Explanation / Answer

= 4000,000 /(1000-300) = 5714.29 units

Calculate number of computers made to earn profit

= 4000,000 + 1000,000/1000-300 = 7143

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