Assignment
Zeta Inc. currently sells 10,000 model Y TV's that have a sales price of $400 and variable costs of $240 each. The company has fixed costs of $900,000.
a. What is Zeta Inc.'s income from model Y TV's?
b. By how much would income change under each of the following independent proposed changes?
Should the change be made?
If higher quality materials are used for special features, the sales price will increase to $440, variable costs to $270 and the number of units sold will decrease by 10% Robots will be introduced into the production line. Variable costs per unit will decrease by $60 and fixed costs will increase to $1,200,000.