An electronics company has developed a new hand-held device. the company predicts that the start-up cost to manufacture the new product will be $125,000, and the cost to make one device will be $6.50. a. if the company plans on selling the device at a wholesale price of $9, write and solve an inequality to determine how many must be sold for the company to make a profit. show your work. b. the cost of making one device is 10% more than the company predicted. what is the new cost of making one device? how many devices must it now sell at the same wholesale price to make a profit? c. suppose the company wants to start making a profit after selling the same number of devices you found in part a. what should the new wholesale price be? explain how you found this price.

A) to calculate the break even point we can use the following:

break even point = fixed costs / contribution margin

break even point = 125,000 / (9 - 6.5) = 125,000 / 2.5 = 50,000 units

The company must sell over 50,000 units to make a profit

B) if the unit production costs increase 10%, the new unit cost will be $7.15, and the new break even point will be: 125,000 / (9 - 7.15) = 125,000 / 1.85 = 67,567.6 which we round up to 67,568 units.

Now the company must sell at least 67,568 units to make a profit

C) If the company wants to increase its product price to a level where the break even point is 50,000 units, then the new price should be $9.65.

The contribution margin must be $2.5, so if the production costs are $7.15, we just add $2.5 to get $9.65 per unit.

the answer is i don't know

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