Question
Roadside Inc is fine-tuning a combination flashlight / WiFi hotspot. The new product would sell for $36.32. Variable cost of production would be $14.83 per
Roadside Inc is fine-tuning a combination flashlight / WiFi hotspot. The new product would sell for $36.32. Variable cost of production would be $14.83 per unit. Setting up production would entail relevant fixed costs of $293,652. The board of directors, citing technical risk, insists that this project cannot go forward unless the new product would earn a return on sales of 14%. Calculate breakeven sales in DOLLARS, meeting the profit target. (Rounding: penny.) Roadside Inc's new product would sell for $41.21. Variable cost of production would be $11.45 per unit. Setting up production would entail relevant fixed costs of $298,557. The project cannot go forward unless the new product would earn a return on sales of 16%. Calculate breakeven sales in UNITS, meeting the profit target. (Rounding: tenth of a unit.)
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