Last year company A introduced a new product and sold 25,900 units at $97.00 per unit. The product variable expense $67.00 per unit with a fixed price expense of $835,500 per year. a. What is the product's net income or loss last year? b. What is the product break-even point in unit sales and dollar sales? c. Assume the company has conducted a market study that estimates it can increase sales by 5,000 units for each $2.00 reduction in its selling price. If the company would only consider increments of $2.00(e.g. $68,$66, etc) What is the maximum annual profit that can be earned on this product? What sales volume and selling price per unit generate the maximum profit? d. What would be the break-even point in unit sales and dollar sales using the selling price that was determined in the required letter c above?
Last year company A introduced a new product and sold 25,900 units at $97.00 per unit. The product variable expense $67.00 per unit with a fixed price expense of $835,500 per year.
a. What is the product's net income or loss last year?
b. What is the product break-even point in unit sales and dollar sales?
c. Assume the company has conducted a market study that estimates it can increase sales by 5,000 units for each $2.00 reduction in its selling price. If the company would only consider increments of $2.00(e.g. $68,$66, etc) What is the maximum annual profit that can be earned on this product?
What sales volume and selling price per unit generate the maximum profit?
d. What would be the break-even point in unit sales and dollar sales using the selling price that was determined in the required letter c above?
Thank you,
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