Question
DigiCom is a new company trying to take market share away from Apples IPod in the MP3 player market (Ha! Good luck!). They are offering
DigiCom is a new company trying to take market share away from Apples IPod in the MP3 player market (Ha! Good luck!). They are offering the 8gb Lame for $50 each, and the 16gb Lame Plus for $100. Their variable costs are $40 for each Lame and $30 for each Lame Plus, and in their first quarter they sold 36,000 units of Lame and 12,000 units of Lame Plus. Their fixed costs total $300,000. (Check Figure: VC/unit = 37.50)
Find the breakeven point in terms of total # of units sold. At their current sales mix, how many units of Lame and how many units of Lame Plus would this be?
They are targeting a profit of $500,000 for the year to make a dent in Apples market share. How many units will they have to sell to achieve that goal?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started