Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

please help with A IL LUSL 32 Problem 1 The owner of a small manufacturing business has patented a new device for washing dishes and

please help with A image text in transcribed
IL LUSL 32 Problem 1 The owner of a small manufacturing business has patented a new device for washing dishes and cleaning dirty kitchen sinks. Before trying to commercialize the device and add it to his or her existing product line, the owner wants reasonable assurance of success. Variable costs are esti- mated at $7 per unit produced and sold. Fixed costs are about $56,000 per year. a. If the selling price is set at $25, how many units must be produced and sold to break even? Use both algebraic and graphic approaches. b. Forecasted sales for the first year are 10,000 units if the price is reduced to $15. With this pricing strategy, what would be the product's total contribution to profits in the first year? SOLUTION a. Beginning with the algebraic approach, we get F 56,000 Q= - 25 - 7 3,111 units ..6 250 GO o 8

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_2

Step: 3

blur-text-image_3

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

The Economics Of Money Banking And Financial Markets

Authors: Frederic S. Mishkin

11th Global Edition

1292094184, 978-1292094182

More Books

Students also viewed these Finance questions

Question

mple 10. Determine d dx S 0 t dt.

Answered: 1 week ago