Question
Asus has been facing declining hardware sales for years. Last year Asus's hardware sales amounted to $195 B. Asus is considering an across the board
Asus has been facing declining hardware sales for years. Last year Asus's hardware sales amounted to $195 B. Asus is considering an across the board (product line) price reduction of 9% in an effort to stem the hardware sales decline. Assuming Asus's gross margin is 44%, and that the cost of goods sold (COGS) is the only variable cost, how much must sales (at the new gross margin) increase in order to maintain the same level of gross profit?
A) The current gross profit is __________________ . (Round to two decimal places).
B) Set the initial price to $1000.00 per unit. Then the new price is ______________ . (Round to two decimal places.)
C) The new gross margin in decimal form is ____________ . (Round to four decimal places.)
D) The new sales level needed to maintain the original gross profit in terms of absolute dollars is $ ___________ billion (Round to 2 decimal places.)
E) The increase in sales equals $ ____________ billion. (Round to two decimal places.)
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