NoNox manufactures gasoline additives. The variable material cost is $0.72 per pint, and the variable labor cost is $1.90 per pint. Suppose NoNox incurred a fixed cost of $510,000 during the year. What if the selling price is $4.25 per pint?
a/ what is the volume of gasoline additives (in pints) that NoNox has to produce to break even annually?
b/ If NoNox plans to earn a profit of $250,000, what is the volume of gasoline additive that it should manufacture?
Quantity break-even = fixed ÷ sales - variable cost(s)
Thank you for your help.
Quantity to Break Even = Fixed Cost / (Sale Price - Variable Cost)
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