Answer:
1. $12
2. $8
Explanation:
1. At Break-Even, George's profit will be equal to their cost.
Revenue = Costs.
Variable costs are $9.
Fixed costs are $24,000
Quantity is 8,000 shirts
Let the Break-Even price be x.
8,000x = 24,000 + (9 * 8,000)
8,000x = 24,000 + 72,000
8,000x = 96,000
x = 96,000/8,000
= $12
2. At 50% more shirts. George's would be selling;
= 8,000 + 8,000(0.5)
= 12,000 shirts
New Break-Even Point will be;
12,000x = 24,000 + 72,000
12,000x = 96,000
x = 96,000/12,000
x = $8
