Andy is considering the wholesaling of fancy phone cases made in Finland. He must travel to Finland to check on quality and transportation issues. The trip would cost $1000. The cost of each phone case is $10 and shipping to the United States can occur through the postal system for $3 per case or through a freight company which will ship a container that can hold up to 2000 cases at a cost of $2400. The freight company will charge $2400 even if less than 2000 cases are shipped. Andy will try to sell the phone cases to retailers for $20. Assume there are no other costs and benefits.

Questions:

a. What is the break-even point if shipping is through the freight company?

b. What is the minimum number of units sold if Toby uses the freight company and he wants a profit of $19,000?

c. At what output level would the two shipping methods yield the same profit?

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