6:33 PM T-Mobile LTE Chicago Albany Park Sunday 1:56 PM Edit Prices are going up

Question

6:33 PM T-Mobile LTE Chicago Albany Park Sunday 1:56 PM Edit Prices are going up Rather than just increase the price tag on the present p Dooper cleaner", the plan is to put the same product in a new box and call Super Dooper Cleaner The new container will be introduced by an estravagant publicity program. Current sales are 1,000,000 boxes a year at 51 per boN Fixed cos ae $300,000 and variable costs are $0.60 per unit. It is anticipated that neither sales volume nor variable costs will increase, but the publicity campagn a. If the new price is $1.29 per box, what is the next hreak-even point? 3 Poins

Explanation / Answer

the demand is for 1,000,000 units selling price is $1.29, variable cost is $0.60, then BEP is

BEP= Fixed cost/ (selling price- variable cost)

= 300,000/ 1.29-0.6= 300,000/0.69= 434,783 units

the demand is for 1,000,000 units selling price is $1.29, variable cost is $0.60, the additional promotions cost is

$600,000

Now the total fixed cost becomes as= 600,000+300,000= $900,000

BEP= Fixed cost / (selling price- variable cost)

BEP= 900,000/ 1.29-0.60= 900,000/0.69= 1,304,347 units

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