Unit 6 Exercise 1. A manufacturer produces three types of humidifiers. The retail price of Humidifier Regular (HR) is $60 with variable costs of
$20. Humidifier Advanced (HA) sells for $200 for its advanced features. This model's variable costs are $80. Humidifier Simple
(HS) is a simplified version and only sells for $25 with variable costs of $15. The manufacturer has machines and facilities
worth $320,000 annually. The sales data show that 1000 units of HR, 2000 units of HA, and 10,000 units of HS was sold last
year. Calculate the break-even point of the firm. The firm has some idle capacity at these volumes, and chooses to cut the
selling price of HR from $60 to $45, believing that its sales volume will rise from 1000 units to 2500 units. What is the revised
break-even point?
No