Question
Company ABC introduced a new product last year for which it is trying to find an optimal selling price. Marketing studies suggest that the company
Company ABC introduced a new product last year for which it is trying to find an optimal selling price. Marketing studies suggest that the company can increase sales by 5,000 units for each $2 reduction in the selling price. The company's present selling price is $93 per unit, and variable expenses are $63 per unit. Fixed expenses are $838,500 per year. The present annual sales volume (at the $93 selling price) is 25,700 units.
What is the present break-even point in unit sales and in dollar sales? (Do not round intermediate calculations.)
Break-even point in units: ___________
Break-even point in dollar sales: ____________
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