Question
A company wants to begin selling a new pair of hand-held pliers in the upcoming fiscal year. They want to know how many hand-held pliers
A company wants to begin selling a new pair of hand-held pliers in the upcoming fiscal year. They want to know how many hand-held pliers they will have to sell in order to break-even on this investment. They received the following data from the chief financial officer:
Fixed costs
Metal molding machine $100,000
Plastic grip molder $25,000
Sander $5,000
Variable costs
Packaging material $ 1.00
Raw material $ 1.00
Grip material $ 0.50
Shipping $ 0.50
The marketing department estimates that they can sell their new pliers for $ 15.00 per unit. The target profit goal for the first year is $ 100,000.
Which of the following represents the breakeven volume (excluding the target profit goal; allow for rounding to the nearest integer, if needed)
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