Question
A firm is able to sell 25,000 units at $ 10 per piece. The company fixed cost is $50,000. Variable cost is $5 per unit.
A firm is able to sell 25,000 units at $ 10 per piece. The company fixed cost is $50,000. Variable cost is $5 per unit. a. What is the contribution per unit? b. What is the breakeven sales in $? What is the breakeven sale in units? c. What is the markup on sales price? What is the mark up on total cost? They raise the price to $15 and demand drops to 15000. d. Calculate the price elasticity. e. What is the new markup (profit margin %) on the sales price ($15)? f. What is the new mark up (profit margin %) on total cost? g. Please calculate the total profit for this company as well as the profit per each toy sold. h. Are they better off raising the price?
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