A producer of felt- tip pens has received a forecast of demand of 30,000 pens for the coming month from its marketing department. Fixed costs of $ 25,000 per month are allocated to the felt- tip operation, and variable costs are 37 cents per pen.
a. Find the break- even quantity if pens sell for $ 1 each.
b. At what price must pens be sold to obtain a monthly profit of $ 15,000, assuming that estimated demand materializes?