Minden Company 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 companys present selling price is $95 per unit, and variable expenses are $65 per unit. Fixed expenses are $838,500 per year. The present annual sales volume (at the $95 selling price) is 25,400 units. (please show your work)

3. Assuming that the marketing studies are correct, what is the maximum annual profit that the company can earn? 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)? (Do not round)

Break-even point in units

Break-even point in dollar sales