Final answer:
The central heating installation company needs to install at least 48 units annually to break-even, based on their fixed costs of $120,000 and variable costs of $1,000 per unit against a price of $3,500 charged per unit.
Step-by-step explanation:
To determine the annual break-even volume for the central heating installation company, we need to calculate the number of units that need to be installed to cover all costs (both fixed and variable). The fixed cost is given as $120,000, and the variable cost is mentioned as $1,000 per unit. The company charges $3,500 for each unit installed.
The break-even point in units can be calculated using the formula:
Break-even volume (units) = Fixed Costs / (Price per unit - Variable cost per unit)
In this case, the calculation would be:
Break-even volume = $120,000 / ($3,500 - $1,000) = $120,000 / $2,500 = 48 units
Therefore, the company needs to install 48 units annually to break even.