AirTravel Inc.manufactures a wide variety of parts for commercial aircraft,including airplane engines.The component is purchased by OEM (original equipment manufacturers)such as Boeing,for use in the larger and more powerful outboards.The units sell for $10,000,and sales volume averages 2,000 units per year.Recently,AirTravel's major competitor lowered the price of the equivalent part to $9,500.The market was very competitive,and AirTravel realized it had to meet the new price or lose significant market share.The controller assembled the following data for the most recent year:
Cost and Usage for Production of 2,000 Units:

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The Answer of AirTravel Inc.manufactures a wide variety of parts for commercial aircraft,including airplane engines.The component is purchased by OEM (original equipment manufacturers)such as Boeing,for use in the larger and more powerful outboards.The units sell for $10,000,and sales volume averages 2,000 units per year.Recently,AirTravel's major competitor lowered the price of the equivalent part to $9,500.The market was very competitive,and AirTravel realized it had to meet the new price or lose significant market share.The controller assembled the following data for the most recent year:
Cost and Usage for Production of 2,000 Units: