The selling price is $360 per unit, variable cost is $155 per unit and the fixed cost is $4,700,000 per year. After calculation, the break-even point is 22,927 units. It means that Conch Republic must sell at least 22,927 units of PDA to cover the fixed cost and gain the profit. After selling 22,927 units of PDA, each PDA been sells, Conch Republic can earn $205. The break-even point is decline is because in Year 1 and Year 2 Conch need to cover the loss sales of the existing PDA. In Year 1, Conch Republic need to cover more loss sales than Year 2, so the break-even point of Year 1 is higher than Year 2. For Year 3, Year 4 and Year 5, it does not need to cover loss sales of existing PDA, so that the break-even point remains
The selling price is $360 per unit, variable cost is $155 per unit and the fixed cost is $4,700,000 per year. After calculation, the break-even point is 22,927 units. It means that Conch Republic must sell at least 22,927 units of PDA to cover the fixed cost and gain the profit. After selling 22,927 units of PDA, each PDA been sells, Conch Republic can earn $205. The break-even point is decline is because in Year 1 and Year 2 Conch need to cover the loss sales of the existing PDA. In Year 1, Conch Republic need to cover more loss sales than Year 2, so the break-even point of Year 1 is higher than Year 2. For Year 3, Year 4 and Year 5, it does not need to cover loss sales of existing PDA, so that the break-even point remains