(Solution) - Stone Corporation is a manufacturing company that makes small electric -(2025 Original AI-Free Solution)

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Academic Level: Undergrad. (yrs 3-4)

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Pages: 5 Words: 1375

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Stone Corporation is a manufacturing company that makes small electric motors it sells for $45 per unit.
The variable costs of production are $25 per motor, and annual fixed costs of production are $800,000.
Required
a. How many units of product must Stone make and sell to break even?
b. How many units of product must Stone make and sell to earn a $120,000 profit?
c. The marketing manager believes that sales would increase dramatically if the price were reduced to $40 per unit. How many units of product must Stone make and sell to earn a $160,000 profit, if the sales price is set at $40 per unit?