Question
The Millers are thinking of introducing a new product line in their store. For this exercise, assume the following: Total fixed costs for the line
The Millers are thinking of introducing a new product line in their store. For this exercise, assume the following:
- Total fixed costs for the line are estimated at $15,000.
- Total number of units they expect to sell are 10,000, based on a market study.
- Total variable costs are $20,000.
- Unit selling price is $4.50.
Based on the information, answer the following questions:
- What is the break-even point in units?
- What is the break-even point in revenue?
- Should they go ahead with their plan?
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Foundations of Financial Management
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta
10th Canadian edition
1259261018, 1259261015, 978-1259024979
