Introduction to Management Science: A Modeling and Case Studies Approach with Spreadsheets 5th Editi

              e)    Break-even point = $250,000 / ($4500 – $2000) = 100, so it will be profitable to produce if Q > 100.


              f)    The fixed cost of designing and setting up the production facility can be as high as $750,000 before it becomes unprofitable to produce the clocks.

              g)    The production cost can be as high as $3,666.67 before it becomes unprofitable to produce the clocks.





              h)    If the design and setup cost were 50% higher ($375,000) and the production cost were 50% higher ($3000), then the break-even point would be 250. With a sales forecast of 300, it would still be profitable to produce the clocks.

              i)     The selling price can be as low as $2833.34 and it would still be profitable to produce the clocks.


              j)     Profit = $4500 * (200) - $2000 * $300 - $250,000 = $50,000. Yes it would still be profitable.