WebTech Development of Austin, Texas, is considering thepossible introduction of a new product proposed by itsresearch and development staff. The firm’s marketing directorestimates the product can be marketed at a price of $70. Totalfixed cost is $278,000, and average variable cost is calculatedat $48.a. What is the breakeven point in units for the proposedproduct?b. The firm’s CEO has suggested a target profit return of$214,000 for the proposed product. How many units mustbe sold to both breakeven and achieve this target return?
WebTech Development of Austin, Texas, is considering thepossible introduction of a new product proposed by itsresearch and development staff. The firm’s marketing directorestimates the product can be marketed at a price of $70. Totalfixed cost is $278,000, and average variable cost is calculatedat $48.a. What is the breakeven point in units for the proposedproduct?b. The firm’s CEO has suggested a target profit return of$214,000 for the proposed product. How many units mustbe sold to both breakeven and achieve this target return?
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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WebTech Development of Austin, Texas, is considering the
possible introduction of a new product proposed by its
research and development staff. The firm’s marketing director
estimates the product can be marketed at a price of $70. Total
fixed cost is $278,000, and
at $48.
a. What is the breakeven point in units for the proposed
product?
b. The firm’s CEO has suggested a target profit return of
$214,000 for the proposed product. How many units must
be sold to both breakeven and achieve this target return?
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