(TCO 6) T-Tunes, Inc. is considering the introduction of a new music player with
(TCO 6) T-Tunes, Inc. is considering the introduction of a new music player with
the following price and cost characteristics:
Sales price per unit: $120
Variable cost per unit: $60
Annual fixed costs: $150,000
(a) How many units must T-Tunes sell to break even?
(b) How many units must T-Tunes sell to make an operating profit of $240,000 for the year?
(c) What will the operating profit be, assuming that the projected sales for the year are 8,000 units?
Consider requirements (b) and (c) independent of each other.
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