FINANCE
15-12B. (Fixed costs and the break-even point) Mini-Kool hopes to earn $70,000 next year after taxes. Sales will be $2,500,050. The firm’s single plant manufactures only small refrigerators. These are used in many recreational campers. The refrigerators sell for $75 per unit and have a variable cost of $58. Mini-Kool experiences a 45 percent tax rate.
a. What are the firm’s fixed costs expected to be next year?
b. Calculate the firm’s break-even point both in units and dollars.
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