To maximize market share, what price do you suggest to the company executives?          If the price is set at $5, find the break even number of units       Suppose Crazy Key Company priced the keys at $5 and aimed to achieve $500 profit in the first month, how many units would they need to sell?        Suppose Crazy Key Company priced the keys at $5 and ended up selling 1000 key chains.  With this information please find:   Amt. of Total Revenue:    Amt. of Total Profit:

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...
icon
Related questions
Question

he Crazy Key Company is getting ready to put a new key chain on the market.  The raw materials and labor to make the key chain add up to cost $2 per unit, while the machine used to make them costs $1000. To simplify the situation, let us pretend these are the only sources of costs. With this information, answer the following questions.

 

The amount of unit variable cost for this produc is 

 

The amount of total fixed cost for this product is 

 

 The Crazy Key Company executives are arguing over the price of the key chain.  They want you to help make the decision. Based on the information you found above and the information given below, find the unit contribution and total contribution for the three price options. In addition, decide which price is the best option.

Price                                 Estimated Sale Units                

$4.00                                1000 units

$5.00                                700 units

$6.00                                500 units

 

At the $4.00 price:  Unit Contribution is  , Total Contribution is 

  

At the $5.00 price:  Unit Contribution is  , Total Contribution is

 

 At the $6.00 price:  Unit Contribution is  ,  Total Contribution is 

 

 

To maximize profit, what price do you suggest to the company executives? 

 

  

To maximize market share, what price do you suggest to the company executives? 

 

 

 

 

If the price is set at $5, find the break even number of units 

 

  

Suppose Crazy Key Company priced the keys at $5 and aimed to achieve $500 profit in the first month, how many units would they need to sell? 

 

  

 Suppose Crazy Key Company priced the keys at $5 and ended up selling 1000 key chains.  With this information please find:

 

Amt. of Total Revenue:   

Amt. of Total Profit: 

Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 4 steps with 4 images

Blurred answer
Recommended textbooks for you
Practical Management Science
Practical Management Science
Operations Management
ISBN:
9781337406659
Author:
WINSTON, Wayne L.
Publisher:
Cengage,
Operations Management
Operations Management
Operations Management
ISBN:
9781259667473
Author:
William J Stevenson
Publisher:
McGraw-Hill Education
Operations and Supply Chain Management (Mcgraw-hi…
Operations and Supply Chain Management (Mcgraw-hi…
Operations Management
ISBN:
9781259666100
Author:
F. Robert Jacobs, Richard B Chase
Publisher:
McGraw-Hill Education
Business in Action
Business in Action
Operations Management
ISBN:
9780135198100
Author:
BOVEE
Publisher:
PEARSON CO
Purchasing and Supply Chain Management
Purchasing and Supply Chain Management
Operations Management
ISBN:
9781285869681
Author:
Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher:
Cengage Learning
Production and Operations Analysis, Seventh Editi…
Production and Operations Analysis, Seventh Editi…
Operations Management
ISBN:
9781478623069
Author:
Steven Nahmias, Tava Lennon Olsen
Publisher:
Waveland Press, Inc.