Problem 5-19 Break-Even Analysis; Pricing (LO5-1, LO5-4, L05-5) 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 company's present selling price is $97 per unit, and variable expenses are $67 per unit. Fixed expenses are $838,800 per year. The present annual sales volume (at the $97 selling price) is 25,400 units. Required: 1. What is the present yearly net operating income or loss? 2. What is the present break-even point in unit sales and in dollar sales? 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? 4. What would be the break-even point in unit sales and in dollar sales using the selling price you determined in (3) above (c.g. the selling price at the level of maximum profits)? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required Required 4 What is the present yearly net operating income or loss? Required Required 2 > penses are 58 $97 selling price) is 25,400 units. Required: 1. What is the present yearly net operating income or loss? 2. What is the present break-even point in unit sales and in dollar sales? 3. Assuming that the marketing studies are correct, what is the maximum annua and at what selling price per unit would the company generate this profit? 4. What would be the break-even point in unit sales and in dollar sales using the selling price at the level of maximum profits)? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 What is the present break-even point in unit sales and in dollar sales? (Do not round Break-even point in units Break-even point in dollar sales sales by 5,000 units for each $2 reduction in the s $97 per unit, and variable expenses are $67 per unit. Fixed expenses are $838,80 $97 selling price) is 25,400 units. Required: 1. What is the present yearly net operating income or loss? 2. What is the present break-even point in unit sales and in dollar sales? 3. Assuming that the marketing studies are correct, what is the maximum annual pri and at what selling price per unit would the company generate this profit? 4. What would be the break-even point in unit sales and in dollar sales using the sel selling price at the level of maximum profits)? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 What would be the break-even point in unit sales and in dollar sales using the selling prio (e.g., the selling price at the level of maximum profits)? (Do not round intermediate calcu Break-even point in units Break-even point in dollar sales
