## Expert Answer

Fixed cost of manufacturing per week = $6000

Variable cost of manufacturing auto parts at new location per unit = 0.8$

Selling price of the auto parts per unit = $1.8

Let sales per week be = S

**Part 1:**

Therefore, in order to break even,

Total Fixed cost + Total Variable cost = Total Sales (in dollar value)

$6000 + 0.8$ X S = $1.8 X S

- $6000 = $1.0 X S
- S = 6000 auto parts

**Part 2:**

Expected Sales per week = 22,000

Therefore, sales per week in dollar value = 22,000 X $1.8 = $39600

Fixed cost of manufacturing per week = $6000

Variable cost for manufacturing 22,000 auto parts = $0.8 X 22,000 = $17,600

Therefore, Total cost = Fixed Cost + Variable Cost = $17,600 + $6000 = $23,600

Hence, Total Profit/Loss per week = Total revenue per week – Total cost per week = $39,600 – $23,600

= $16,000

**Part 3:**

Expected Profit = $10000

Let Sales per week be = ‘S’

We know that,

Profit = Total Revenue – Total cost

Therefore,

$10000 = $1.8 X S – ($6000 + $0.8 X S)

- $10000 = $1.0 X S – $6000
- $1.0 X S = $10000 + $6000
- S = 16000

**Part 4:**

New Fixed cost = $6000 + $500 + $500 = $7000

Therefore, in order to break even,

Total Fixed cost + Total Variable cost = Total Sales (in dollar value)

$7000 + 0.8$ X S = $1.8 X S

- $7000 = $1.0 X S
- S = 7000 auto parts

And, in order to make a profit of $10000

$10000 = $1.8 X S – ($7000 + $0.8 X S)

- $10000 = $1.0 X S – $7000
- $1.0 X S = $10000 + $7000
- S = 17000