The Oliver company plans to market a new product. Based on its market studies, Oliver estimates that it can sell up to 5,000 units in 2005. The selling price will be $2 per unit. Variable costs are estimated to be 20% of total revenue. Fixed costs are estimated to be $5,600 for 2005. How many units should the company sell to break even ?
A)5,000 units
B) 5,600 units
C) 2,333 units
D) 3,500 units
E) 2,800 units

Question

The Oliver company plans to market a new product. Based on its market studies, Oliver estimates that it can sell up to 5,000 units in 2005. The selling price will be $2 per unit. Variable costs are estimated to be 20% of total revenue. Fixed costs are estimated to be $5,600 for 2005. How many units should the company sell to break even  ?
A)5,000 units
B) 5,600 units
C) 2,333 units
D) 3,500 units
E) 2,800 units

Quizplus · Accepted Answer

The Answer of The Oliver company plans to market a new product. Based on its market studies, Oliver estimates that it can sell up to 5,000 units in 2005. The selling price will be $2 per unit. Variable costs are estimated to be 20% of total revenue. Fixed costs are estimated to be $5,600 for 2005. How many units should the company sell to break even  ?
A)5,000 units
B) 5,600 units
C) 2,333 units
D) 3,500 units
E) 2,800 units

The Oliver Company Plans to Market a New Product