Week 4

Gamechanger Audio sells the Plasma Coil guitar effects pedal, an electronic version of an analog coil reverb. The Plasma Coil costs $230.00 to produce. Gamechanger sells the unit for $350.00. Fixed costs associated with it are $150,000. Industry sales of reverb pedals at manufacturers prices are $6,123,850.

Industry sales are projected to grow 3.3% in the coming year. To capture more unit sales, Gamechanger wants to lower the Plasma Coil price to $330.00. It is believed that variable costs will remain unchanged. What percent of next years market does Gamechanger need to break even? (Show your answer to two (2) decimal places.) 6.33%

8.14%

6.79%

7.83%