Break-even analysis
The Warren Watch Company sells watches for $26, fixed costs are $180,000, and variable costs are $12 per watch.
a. What is the firm's gain or loss at sales of 9,000 watches? Enter loss (if any) as negative value. Round your answer to the nearest cent.
$
b. What is the firm's gain or loss at sales of 16,000 watches? Enter loss (if any) as negative value. Round your answer to the nearest cent.
$
c. What is the break-even point (unit sales)? Round your answer to the nearest whole.
units
d. What would happen to the break-even point if the selling price was raised to $34?
e. What would happen to the break-even point if the selling price was raised to $34 but variable costs rose to $20 a unit? Round your answer to the nearest whole.