Allstate HVAC recently developed a low-end electronic thermostat that it plans on selling via a cable channel marketing program. The cable programs fee for selling the item is 20% of revenue. For this fee, the program will advertise the thermostat over six 10-minute segments in September. Allstates fixed costs of producing the thermostats are $110,000 per production run. The company plans to wait for all orders to come in, and then it will produce exactly the number of units ordered. Variable production costs are $25 per unit. In addition, it will cost approximately $5 per unit to ship the thermostats to customers. Production time will be less than three weeks. Henry Kristen, a product manager at Allstate, is charged with recommending a price for the thermostat. Based on his experience with similar items, focus group responses, and survey information, he has estimated the number of units that can be sold at various prices: Unit Price Quantity

$90 5,000

$77 8,000

$65 11,000

$62 13,000

At which price should the company sell it products?

$90 $77 $65 $62