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Question 2: i. P1 is $10, VC is $2. Q1 (initial sales) is 1,000 units. Please find Q2 (nevw sales) that would make a 10%
Question 2: i. P1 is $10, VC is $2. Q1 (initial sales) is 1,000 units. Please find Q2 (nevw sales) that would make a 10% price cut break even. (15 points) ii. P1 is $10, VC is $2. Q1 (initial sales) is 1,000 units. Please find Q2 (new sales) that would make a 10% price increase break even. (15 points) Question 3: How much would sales have to increase to make a 5% price reduction profitable for the following product (20 points): Current Price . Current Sales (monthly) Variable Cost Per Unit . Fixed Overhead (monthly) .Profit (monthly) $10 1000 units $8 $1,600 $400 What are the profit implications for a 40% actual sales increase? (20 points)
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