Question
A producer is currently selling three different brands (Brand A, Brand B, and Brand C) of freezers. Brand A is sold for $300 and its
A producer is currently selling three different brands (Brand A, Brand B, and Brand C) of freezers. Brand A is sold for $300 and its variable cost is $60; Brand B is sold for $100 and its variable cost is $65; Brand C is sold for $250 and its variable cost is $140. The producer received a forecast of sales of 1200 units of Brand A, 600 units of Brand B, and 1000 units of Brand C freezers for the coming year from the most recent market research conducted. Suppose the annual total fixed cost (i.e., rent, equipment, utilities, etc.) is $280,000, determine the break-even point in dollars for the coming year. On average, how much sales (in dollars) should be generated each month in order to break-even?
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