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Breakeven points

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Breakeven Points

1. The purchasing manager for Forster's Fashion Bags has been able to purchase the materials for its signature handbags for $3 less per bag. If everything is kept the same, what effect would this reduction in material cost have on the breakeven point for Forster's Fashion Bags?

2. Now, assume that the sales manager decides to reduce the selling price of each handbag by $3. What would be the net effect of both changes be on the breakeven point in units for Forster's Fashion Bags?

3. Would you recommend a different approach to the purchasing manager if the results are not favorable to the organization? Please explain.

Reference no: EM132717901

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