Assume atlantic fish sells 3,200 pounds of fish per month at a price of $2.90 a pound. the variable cost per pound is $2.22. currently, the firm has a cash-only sales policy. the firm is considering changing to a net 30 credit policy. the monthly required return is 1.2 percent. what does the new level of sales need to be to break-even on the switch

The break-even level of sales is equal to 3372.64 pounds.

Explanation:

The quantity of fish sold per month is 3,200 pounds.

The price of fish is $2.90/pound.

The variable cost per pound is $2.22.

The monthly required return is 1.2%.

Contribution per unit will be

=Selling Price-Variable Cost

=$2.9-$2.22

=$0.68 per unit

Loss on account of changing to net 30 policy

=Quantity*Selling Price*required return

=Quantity*$2.9*1.2%

To break even, excess Contribution should be equal to loss on policy change

or,

Here, we assume quantity to be X

(X-3200)*$0.68 = X*$2.9*1.2%

(X-3200)*19.54= X

18.54X=$62,528.74

X=

X=3372.64 pounds

1   all nations face the problem of scarcity because there are limited resources and unlimited wants. nations do not have enough factors of production to produce everything that their population wants. entrepreneurial resources initiate businesses to make new goods and services; labor resources produce goods and services.

2 there are four factors of production: natural resources, labor resources, capital resources, and entrepreneurial resources. natural resources are raw materials from nature that are used to produce goods. trees, water, and grains are natural resources. some natural resources, such as wheat and cattle, are renewable

3 wants

things that you do not need to have in order to survive, but would like to have

needs

things that you must have in order to survive

goods

physical products

services

tasks that a business perform for customers

resources

items that people can use to make or obtain what they need or want

determine

to settle or decide by choice of alternatives or possiblities

4 i really dont know