1. MBR Manufacturing Corp. is considering marketing their new hearing aid in the city of Big Smoke. The primary target market for this device is the hearing impaired over the age of 60 years. As she considers the possibility, the VP/Marketing reviews the following data for FY 2021:

Retail price : $449

Retail margin : 42.5%

Wholesale margin : 27.5%

R & D on hearing aid, FYs 2019, 2020 : $119,000

Introductory promotional outlays, FY2021: $159,000

MBRs fixed manufacturing costs : $155,000 per year (FY 2021)

Variable manufacturing costs/unit : $95

Retailers salespersons commission : 2% of retailers selling price

MBRs sales commission paid : 4% of manufacturers selling price

Population of Big Smoke : 2,975,000

Proportion of population over 60 years : 18%

1. How many units must MBR sell in the first year (2021) to break even? Carefully explain, including any assumptions that you make. (6)

2. If 15% of the over 60 population is hearing impaired, what is MBRs break-even market share in 2021? (Identify and explain any assumption(s) that are necessary). (6)

3. Given MBRs market share (see (c) above), assess MBRs prospects of breaking even in 2012. (2)