Cost–Volume–Profit Relationships
Bragg & Stratton Company manufactures a specialized motor for chain saws. The company expects to manufacture and sell 30,000 motors in year 2001. It can manufacture an additional 10,000 motors without adding new machinery and equipment. Bragg & Stratton’s projected total costs for the 30,000 units are as follows:
The selling price for the motor is $80.
(a) What is the total manufacturing cost per unit if 30,000 motors are produced?
(b) What is the total manufacturing cost per unit if 40,000 motors are produced?
(c) What is the break even price on the motors?