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Variable Cost/Fixed Costs

Slick Pads is a company that manufactures laptop notebook computers. The company is considering adding its own line of computer printers as well. It has considered the implications from the marketing and financial perspectives and estimates fixed costs to be $500,000. Variable costs are estimated at $200 per unit produced and sold:

A. If the company plans to offer the new printers at a price of $350, how many printers does it have to sell to break even?
B. Describe the types of operations considerations that the company needs to consider before making the final decision.

Solution Preview

A. If the company plans to offer the new printers at a price of $350, how many printers does it have to sell to break even?

Break even= Fixed costs/(Sales-variable cost)
=500000/(350-200)
=3334 units
or 3334 Printers

B. Describe ...

Solution Summary

Brief answers are given and explained to questions on selling needs to break even and operations considerations.

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