Question
A manufacturing company is planning to introduce a new product line. The company's fixed costs amount to $100,000 per month. The variable cost per unit
A manufacturing company is planning to introduce a new product line. The company's fixed costs amount to $100,000 per month. The variable cost per unit for the new product is estimated at $20. After extensive market research, the company determines that the selling price per unit should be set at $40 to remain competitive. Considering the proposed selling price and variable costs, calculate the breakeven point in both units and sales revenue. Discuss the implications of breakeven analysis for the company's pricing strategy and profitability.
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