See-Clear Optics is considering producing a new line of eyewear. After considering the costs of raw materials and the cost of some new equipment, the company estimates fixed costs to be Php 1,000,000 with a variable cost of 2,000 per unit produced.a. If the selling price of each new product is set at Php 3500, how many units need to be produced and sold to break even?b. If the selling price of the product is set at Php 3000 per unit, See-Clear expects to sell 2000 units. What would be the total contribution to profit from this product at this price?c. See-Clear estimates that if it offers the product at the original target price of Php 3500 per unit, the company will sell about 1500 units. Will the pricing strategy of Php 3500 per unit or Php 3000 per unit yield a higher contribution to profit? See-Clear Optics is considering producing a new line of eyewear. Afterconsidering the costs of raw materials and the cost of some new equipment, thecompany estimates fixed costs to be Php 1,000,000 with a variable cost of 2,000 perunit produced.a. If the selling price of each new product is set at Php 3500, how many units needto be produced and sold to break even?b. If the selling price of the product is set at Php 3000 per unit, See-Clear expectsto sell 2000 units. What would be the total contribution to profit from thisproduct at this price?c. See-Clear estimates that if it offers the product at the original target price ofPhp 3500 per unit, the company will sell about 1500 units. Will the pricingstrategy of Php 3500 per unit or Php 3000 per unit yield a higher contribution toprofit?

Answered: If the selling price of each new…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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See-Clear Optics is considering producing a new line of eyewear. After considering the costs of raw materials and the cost of some new equipment, the company estimates fixed costs to be Php 1,000,000 with a variable cost of 2,000 per unit produced.
a. If the selling price of each new product is set at Php 3500, how many units need to be produced and sold to break even?
b. If the selling price of the product is set at Php 3000 per unit, See-Clear expects to sell 2000 units. What would be the total contribution to profit from this product at this price?
c. See-Clear estimates that if it offers the product at the original target price of Php 3500 per unit, the company will sell about 1500 units. Will the pricing strategy of Php 3500 per unit or Php 3000 per unit yield a higher contribution to profit?

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