Harvey's Hardware is thinking about starting a line of lawnmowers to serve its customer base in the summer.The lawnmowers would be priced at $100 and Harvey the manager believes that they would sell 3 units.They have the following estimated costs.Use this information for question

-How many units should Harvey's Housewares produce?
A)1 unit
B)2 units
C)3 units
D)Zero units,at these prices,the production should not start

Question

Harvey's Hardware is thinking about starting a line of lawnmowers to serve its customer base in the summer.The lawnmowers would be priced at $100 and Harvey the manager believes that they would sell 3 units.They have the following estimated costs.Use this information for question
 
-​How many units should Harvey's Housewares produce?
A)​1 unit 
B)2 units 
C)3 units 
D)​Zero units,at these prices,the production should not start

Quizplus · Accepted Answer

The total estimated cost of producing 3 units is equal to the estimated revenue of $300 (3 units x $100). Therefore, producing 3 units would result in a breakeven point. It would not be profitable to produce less than 3 units as the total costs would outweigh the revenue. It would also not be profitable to produce more than 3 units as the additional units would not generate enough revenue to cover the additional costs. Thus, producing 3 units is the best choice for Harvey's Housewares.

Harvey's Hardware Is Thinking About Starting a Line of Lawnmowers