XYZ has annual fixed costs of $12,000,000. It manufactures only one product, at a price of $32.50 per unit.

The products variable cost per unit is $12.80. If XYZ wants to generate $20,000,000 how many units must they sell? If it is determined that they can only sell 200,000 units what price must it set per unit in order to break even? Solution Part A Number of Units to be Sold =(12000000+20000000)/(32.50-12.80) = 1624365.48 unit or 1624366 (Rounded up) Part B Let the Selling Price be x So 200000*(x-12.80) 12000000 = 0 x-12.80 = 12000000/200000 x- 12.80 = 60 x = $72.80