Question
The following is annual financial information for a cell phone repair company that has hired you to conduct some pricing analysis for them. Take this
The following is annual financial information for a cell phone repair company that has hired you to conduct some pricing analysis for them. Take this information to answer the following questions. Be sure to show your work:
Total Number of repairs................ 3,500
Average price for repairs................ $200
Variable cost for repairs.................. $50
Fixed cost............................... $300,000
A - Calculate the current contribution margin (1 point)
B - Calculate the current breakeven point. (1 point)
C- Calculate the unit cost. (1 point)
D- Calculate the price at a 20% markup of unit cost. (1 point)
E - Assume number of repairs increased to 4,550 at the 20% markup price calculated above.
- Calculate price elasticity of demand. (1 point)
F - If the company wants to raise the original price by 20%, what would the new price be? (1 point)
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