58 Investment Analysis
Example 2: A manufacturer of automotive accessories produces rear view mirrors. A new
line of mirrors will require fixed costs of $35,000 to produce. Each mirror has a variable
cost of $8.25. The price of mirrors is tentatively set at $12.50 each. What volume is
needed to break even?
12c platinum / 12C
RPN Keystrokes
12c platinum
ALG Keystrokes
Display Comments
35000?1 35000?1
35,000.00
Fixed cost.
8.25?2 8.25?2
8.25
Variable cost.
12.5?3 12.5?3
12.50
Sales price.
0?5 0?5
0.00
tg(010t tg(012t
8,235.29
Break-even volume is between
8,235 and 8,236 units.
What would be the gross profit if the price is raised to $14.00 and the sales volume is
10,000 units?
12c platinum / 12C
RPN Keystrokes
12c platinum
ALG Keystrokes
Display Comments
14?3 14?3
14.00
Sales price.
F and V are already stored.
10000?4 10000?4
10,000.00
Volume.
tg(005t tg(006t
22,500.00
Gross Profit.
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