A company has fixed costs of $300,000 and produces one product with a selling price of $72. 00 and a variable cost of $42. 00 per unit. The maximum factory capacity is 20,000 units and it anticipates selling 15,000 units. Compare a break-even chart with the break-even point and the margin of safety at present. Fully label your diagram.
How much profit will they make:
At the present level of operation?
If sales increase to the maximum that the factory can supply?