A new aluminum part production facility opened for business, selling products for $9,000 each. The rent on the facility building is $5,000/month and additional utilities cost $15,000/month. The production line is open 24 hours every day of the month (calculate with 30 days per month). Each day has three 8-hour shifts with 10 workers present in each of these snifts. All workers get paid $30/hour. The materials used for your product cost $2,500/product. Your accountant advises you that your corporate taxes are estimated to be $500/product. Calculate, how many products you must make and sell in one month to make a $1,000,000 profit per month.

Break-even point in units= 172 units

Explanation:

Fixed costs=  5,000 + 15,000= $20,000

Direct labor cost= [(10*8)*3]*30= $7,200

Tax= $500 per unit

Direct material= $2,500 per unit

To calculate the number of units to be sold, we need to use the following formula:

Break-even point in units= (fixed costs + desired profit) / contribution margin per unit

Break-even point in units= (20,000 + 7,200 + 1,000,000) / (9,000 - 500 - 2,500)

Break-even point in units= 172 units

Prove:

Sales= 172*9,000= 1,548,000

Variable costs= 172*3,000= (516,000)

Contribution margin= 1,032,000

Fixed costs= 27,200

Net income= 1,004,800

1   all nations face the problem of scarcity because there are limited resources and unlimited wants. nations do not have enough factors of production to produce everything that their population wants. entrepreneurial resources initiate businesses to make new goods and services; labor resources produce goods and services.

2 there are four factors of production: natural resources, labor resources, capital resources, and entrepreneurial resources. natural resources are raw materials from nature that are used to produce goods. trees, water, and grains are natural resources. some natural resources, such as wheat and cattle, are renewable

3 wants

things that you do not need to have in order to survive, but would like to have

needs

things that you must have in order to survive

goods

physical products

services

tasks that a business perform for customers

resources

items that people can use to make or obtain what they need or want

determine

to settle or decide by choice of alternatives or possiblities

4 i really dont know

answer about 4-5 percent of the labor force is unemployed;