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Rooney Company is considering adding a new product. The cost accountant has provided the following data: The administrative vice president has provided the following estimates:
Rooney Company is considering adding a new product. The cost accountant has provided the following data:
The administrative vice president has provided the following estimates:
The manager has decided that any new product must at least break even in the first year.
Required
Use the equation method and consider each requirement separately.
- If the sales price is set at $67, how many units must Rooney sell to break even?
- Rooney estimates that sales will probably be 10,000 units. What sales price per unit will allow the company to break even?
- Rooney has decided to advertise the product heavily and has set the sales price at $72. If sales are 7,000 units, how much can the company spend on advertising and still break even?
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