# Problem 13-6 Break-even analysis The Warren Watch

## Question: Problem 13-6 Break-even analysis The Warren Watch…

Problem 13-6

Break-even analysis

The Warren Watch Company sells watches for \$22, fixed costs are \$195,000, and variable costs are \$10 per watch.

What is the firm’s gain or loss at sales of 10,000 watches? Enter loss (if any) as negative value. Round your answer to the nearest cent.

\$

What is the firm’s gain or loss at sales of 18,000 watches? Enter loss (if any) as negative value. Round your answer to the nearest cent.

\$

What is the break-even point (unit sales)? Round your answer to the nearest whole.

Units

What would happen to the break-even point if the selling price was raised to \$31?

-Select-The result is that the break-even point is higher. The result is that the break-even point remains unchanged. The result is that the break-even point is lower. Item 4

What would happen to the break-even point if the selling price was raised to \$31 but variable costs rose to \$20 a unit? Round your answer to the nearest whole.

-Select-The result is that the break-even point decreases. The result is that the break-even point remains unchanged. The result is that the break-even point increases. Item 5