Jack Spratt makes candlesticks. His fixed cost is $5,000, variable cost is $3.50, and selling price, $8.50. To what value must he reduce his variable cost if he wants a break-even point of 900 units?
What will be an ideal response?
Variable cost = (900 * 8.50 - 5,000 )/900 = $2.94
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What will be an ideal response?
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