There is excitement in the air! The new UltraGuard flea collar is about to be

introduced to the market. The collar will feature enhanced protection, increased

longevity and is environmentally friendly. It will be priced at $9.90 and has unit

variable costs of $3.85. The company expects to sell 49,500 UltraGuard collars

during the next six months. Some of the sales will come at the expense of the

current product, the PetArmor collar, priced at $6.55 with variable costs of $3.35.

Projected sales for the PetArmor collar are 95.000 units (without the introduction of

the UltraGuard). The market analyst estimates that the UltraGuard collar will

cannibalize 19,400 PetArmor collars during the introductory 6 month period.

The company is planning a sales promotion campaign to target veternarians at the

time of the new product launch. The company is going to invest $53,850 in printed

materials and samples.

Calculate the breakeven sales volume necessary to justify the promotional campaign.

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