You have conducted some market research for style and size of products you want to use to launch your business. The market research has indicated the following sales price ranges will be optimal for your area depending on style of products you choose to sell:

Collars

o With pricing at $20 per collar, you can expect to sell 30 collars per day.

o With pricing at $24 per collar, you can expect to sell 25 collars per day.

o With pricing at $28 per collar, you can expect to sell 20 collars per day

Leashes

o With pricing at $22 per leash, you can expect to sell 28 leashes per day.

o With pricing at $26 per leash, you can expect to sell 23 leashes per day.

o With pricing at $30 per leash, you can expect to sell 18 leashes per day.

Harnesses

o With pricing at $25 per harness, you can expect to sell 25 harnesses per day.

o With pricing at $30 per harness, you can expect to sell 22 harnesses per day.

o With pricing at $35 per harness, you can expect to sell 20 harnesses per day.

Additionally, you will need to compare your break-even points for the following target profits for each area of your business to determine your prices:

Collars

o Break-even

o $300 target profit each month

o $500 target profit each month

Leashes

o Break-even

o $400 target profit each month

o $600 target profit each month

Harnesses

o Break-even

o $500 target profit each month

o $650 target profit each month

Remember that all break-even and target points must be in whole units (we cannot sell a partial unit). Round up when calculating partial units to ensure costs are covered. Excel tip use ROUNDUP function

Milestone Two - Contribution Margin Analysis COLLARS LEASHES HARNESSES $ $ $ Sales Price per Unit Variable Cost per Unit Contribution Margin 20.00 9.10 22.00 12.10 25.00 14.60 $ 10.90 $ 9.90 $ 10.40