Question
Queens and Kings Inc. sells high quality chess sets (with a clock) for $120.00. The fixed costs for the business are $420,000 and the variable
Queens and Kings Inc. sells high quality chess sets (with a clock) for $120.00. The fixed costs for the business are $420,000 and the variable cost per set is $50.00. Determine: (6 marks total)
a.The number of sets needed to be sold to just breakeven
b.The amount of profit they earn if they sell 8,000 sets
c.By how much can volume (in units) decrease from the baseline (profit from part b), if they decide to increase the price by 20%
d.If marketing thinks sales will decrease to a total of 6,300 because of the price increase, is it a good idea to increase the price AND why? (1)
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