Ten years ago, Judy Kaplan lost her marketing position due to a merger and was looking for a new job. As she discussed her search with Marty and Angela Curry, they realized she might be the perfect partner for their new business. For the last six years, the Curry’s had made and sold six different flavors of pickled garlic at local festivals. People who tried the product really seemed to like it. They had made the decision to go into the pickled garlic business full-time, but needed about $20,000 more to actually make the final move. Kaplan looked at their business plan and agreed to become a partner in the business. One of the first problems the partnership experienced was over pricing. Kaplan wanted to price the bottled garlic high enough so her money would earn the interest it would have received (10%) if she had left it in her investment account. The Curry’s wanted to set a low price so that they could acquire loyal customers. In its first year of operation, the company sold 8,000 cases of 24-bottles to retailers along the West Coast. Its fixed costs were $32,000 and its variable unit costs were $1.25 per bottle. They finally decided to sell individual bottles for $4.95, and a set of all six flavors packaged in a wooden box for $40. About half of the time, customers purchased the sets instead of the individual bottles. What is the breakeven point in units
Ten years ago, Judy Kaplan lost her marketing position due to a merger and was looking for a new job. As she discussed her search with Marty and Angela Curry, they realized she might be the perfect partner for their new business. For the last six years, the Curry’s had made and sold six different flavors of pickled garlic at local festivals. People who tried the product really seemed to like it. They had made the decision to go into the pickled garlic business full-time, but needed about $20,000 more to actually make the final move. Kaplan looked at their business plan and agreed to become a partner in the business. One of the first problems the
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