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A small company makes Automated Teller Machines which they sell to banks and other financial institutions. They are considering starting a separate unit which would
A small company makes Automated Teller Machines which they sell to banks and other financial institutions. They are considering starting a separate unit which would make a new mini ATM. Their research indicates the following: Factory and utilities yearly costs - $420,000 Management salaries - $220,000year Sales and trade promotions budget - $180.000/year Other fixed costs - $50,000/year Each machine would require $15,500 in parts and materials Each machine will require $3,200 in labour, to put it all together and test each machine. The company hired a special research firm to determine the best selling price The research indicated that they would be able to sell the following quantities at the specified prices: Price Market Demand $22,000 400 $24,000 375 $26,000 300 $28.000 200 Calculate which price would be the most profitable and calculate the break-even points for each selling price
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