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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
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 $92 per unit, and variable expenses are 562 per unit Fixed expenses are $839,100 per year The present annual sales volume (at the $92 selling price) is 25.900 units Required: 1 What is the present yearly net operating income or loss? Net operating income Net operating loss 2. What is the present break-even point in unit sales and in dollar sales? Break-even point in units Break-even point in dollar sales 3. Assuming that the marketing studies are correct, what is the maximum annual profit that the company can eam? At how many units and at what selling price per unit would the company generate this profit? Maximum profit Number of units Selling price 4. What would be the break-even point in unit sales and in dollar sales using the selling price you determined in (3) above (e.g. the selling price at the level of maximum profits)? Break-even point in units Break-even point in dollar sales
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