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.

Total Number of repairs................ 3,500

Average price for repairs................ $200

Variable cost for repairs.................. $50

Fixed cost............................... $300,000

Current contribution margin = $200-$50 = $150

Unit cost = ($300,000/3500)+$50 = $135.71

The price at a 20% markup of unit cost = =$135.71(1+0.20) = $162.86

1. Calculate the current breakeven point.

2. Assume number of repairs increased to 4,550 at the 20% markup price calculated above. Calculate price elasticity of demand.

3. If the company wants to raise the original price by 20%, what would the new price be?