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New Information: FI is planning to introduce a new product called ExtraFood at a retail price of $6 per unit using the same retailer
New Information: FI is planning to introduce a new product called ExtraFood at a retail price of $6 per unit using the same retailer (the marketing margin of the retailer is still 20%) and broker (brokerage fee is still 5% of retail price per unit sold). ExtraFood's manufacturing cost is $3 per unit. In order to introduce ExtraFood, FI would incur additional fixed costs of $4,000,000 per year (e.g. research and development, advertising, depreciation on new equipment). Demand for the new product is estimated to be 2 million units, 50% of which is expected to come from SuperFood. 5) What is ExtraFood's Breakeven Volume? (20 points) Multiple choice answer options: 4.666.667 units 3,555,556 units 2,000,000 units 8,000,000 units 6) Question: Comparing the BEV calculated earlier with the actual sales of ExtraFood. Is FI making a profit? Why? (20 points) Multiple choice answer options: No FI is NOT making a profit, actual sales break-even volume Yes Fl is making a profit, actual sales break-even volume
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