Answer:
Tri-County has to charge $824.59 per MWh to breakeven.
Explanation:
Breakeven Point is the level at which a firm neither makes a profit nor a loss.
Step 1 : Calculate the Total Fixed Costs
If If Tri-County has 1,000,000 MWh of demand from its customers other than Boulder, then the total fixed costs has to be established for the company first as follows :
Unit Cost = Total Existing Fixed Costs ÷ Existing Activity (Boulder)
        = $82,500,000 ÷ 150,000 MWh
        = $550 per MWh
Fixed costs including the demand from other customers :
Total MWh = 150,000 MWh ( Boulder) + 1,000,000 MWh (Other customers)
         = 1,150,000 MWh
Therefore,
Total Fixed Costs = Unit Cost × Total MWh
               = $550 × 1,150,000 MWh
               = $632,500,000
Step 2 : Calculate the Break even point in dollars
Break Even Point (dollars) = Fixed Costs ÷ Contribution Margin ratio
Where,
Contribution Margin ratio = Contribution ÷ Sales
                     = Selling Price - Variable Costs ÷ Sales
                      = ($75 - $25) ÷ $75
                      = 0.667
Break Even Point (dollars) =  $632,500,000 ÷ 0.667
                      = $948,275,862.10
Step 3 : Calculate the unit selling price to break even
Unit Price = Total Sales ÷ Total Units Sold
        = $948,275,862.10 ÷ 1,150,000 MWh
        = $824.59 per MWh
Conclusion :
Tri-County has to charge $824.59 per MWh to breakeven
