a) How many product mix units must be sold to break even? b) How does it translate into sales of individual games?
Customary Pricing
There are various types of pricing strategies followed in the market. They are psychological pricing, odd pricing, free onboard pricing, customary pricing, prestige pricing, dual pricing, ruling pricing, negotiated pricing, mark up pricing, etc. each one can be explained as follows:
Multiple Unit Pricing
“Multiple-unit pricing is a practice where a company offers consumers a lower than unit price if a specified number of units are purchased.”
A leading manufacturer of video games is about to introduce four new games. The accompanying table
summarizes price and cost data, Combined fixed costs equal $600,000. A
for each unit sold of Diablo, 2 units of Call of Duty: Modern Warfare, 3 units of Sekiro and 4 units of Starcraft II
will be sold.
Games
Diablo Call of Duty Sekiro Starcraft II
Selling Price (in dollars) 55 48 33 22
Variable cost/unit (in dollars) 22 17 12 11
a) How many product mix units must be sold to break even?
b) How does it translate into sales of individual games?
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
