1.- The Pointer Appliance Company is investigating the additional of a new and improved pulsating blender to its line of consumer appliances. The product chops, grinds, grates and blends smoothies twice as fast as all other blenders on the market. It has a 10 year warranty on the motor and offers a replacement 5 cup glass blender cup for $10.99. The blender is going to require additional expenditures for the production line on the part of the Pointer Company. Management wants to determine what to price the blender at. The total fixed cost associated with manufacturing the blenders is $525,000. The variable cost is $17.99 per unit. Given the costs for adding the blender, management is considering selling the blender at one of these prices: $25.99, $34.99 and $49.99. Calculate the breakeven point in units at each of the selling prices: $25.99, $34.99 and $49.99 and show the calculations. Through your research you know that this is a tough competitive market with many competitors. Most competitors have between 2-8% of the market and the market appears to be growing at a 5% rate per year. The total market for blenders of this type was 1,500,000 units last year. Given that the market leader is selling its blender for $39.99, which price would you recommend and why?

2.- Yoplait has new line of Greek yogurt in a 9 oz. size. The Marketing Managers plan to test market the product in one small market for three weeks. They has calculated the cost and projected sales for each of the different flavors: Plain cost is .55 each with a projected sales of 10,000 units, Strawberry cost per unit is .60 with a projected sales of 13,000 units, Blueberry cost are .68 per unit with a projected sales of 9,000 units. Each yogurt product will retail at the same price. Using the average cost pricing and a 35% markup what will Yoplait price these product at the retail level