Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

need the answer to Maximum Profit. Minden Company introduced a new product last year for which it is trying to find an optimal selling price.

need the answer to Maximum Profit.

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 $70 per unit, and variable expenses are $40 per unit. Fixed expenses are $540,000 per year. The present annual sales volume (at the $70 selling price) is 15,000 units.

Required:

1.

What is the present yearly net operating income or loss?

Answer :

Net Operation Loss $90,000

2.

What is the present break-even point in unit sales and in dollar sales?

Answer:

Break- even point units 18,000

Break -even point sales $1260000

NEED Assistance on maximum profit

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?

What's the answer

Maximum profit = ?

Number Units = 45,000

Selling Price = $58

Answer:

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 units 18,000 = 30,000

Break- even point sales $1260000 =$1740,000

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

More Books

Students also viewed these Accounting questions

Question

Prove that u, v, and w are all in span (u, v, w).

Answered: 1 week ago