Worldview is considering production of a lighted world globe that the company would price at a markup of 20 percent above full cos. Management estimates that the variable cost of the globe will be $50 per unit and fixed costs per year will be $100,000

Required

a. Assuming sales of 1,000 units, what is the full cost of a globe and what is the price with a 20 percent markup?

b. Assume that the quantity demanded at the price calculated in part a is only 500 units. What is the full cost of the globe and what is the price with a 20 percent markup?

c. Is the company likely to sell 500 units at the price calculated in part b?