Suppose that Dove is introducing a new soap (Dove Natural) and expects the following: a cannibalization rate of 10% on units. The revenues of Dove soap are $10,000,000. Dove Natural expects $5,000,000 in new ad buys and an increase of $2,000,000 in Selling, General and Administrative Costs. Assume that Dove sells their soap at a price of $2 per bar and the cost is $0.50 per bar. Suppose that Dove sells Dove Natural at a price of $4 per bar and the cost is $1.50 per bar.   How many bars of soap would Dove Natural have to sell to break even? ( Please show your work)

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Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.