At what price must pens be sold to obtain a monthly profit

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Reference no: EM131920659

Problem

A producer of felt-tip pens has received a forecast of demand of 34,000 pens for the coming month from its marketing department. Fixed costs of $30,000 per month are allocated to the felt-tip operation, and variable costs are 36 cents per pen.

a. Find the break-even quantity if pens sell for $3 each. (Round your answer to the next whole number.)

QBEP units

b. At what price must pens be sold to obtain a monthly profit of $25,000, assuming that estimated demand materializes?

(Round your answer to 2 decimal places. Omit the "tiny_mce_markerquot; sign in your response.)

Price $

Reference no: EM131920659

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