Calculate the break even price

Assignment Help Financial Accounting

Reference no: EM131160736

The variable cost in NewShoes is the unit cost of the product. Fixed costs are the marketing expenses for a region along with the allocated product development expense. Applying the formula with a variable cost of $40, and fixed expenses of $3,500,000, the break-even price for 100,000 units would be: break-even price = $40 + $3,500,000 / 100,000 = $40 + $35 = $75

1. Using the fixed expenses and projected sales from the example, what would the break-even price be if unit cost is $35?

2. If the break-even price is $75, and your target return on sales is 20%, what is the selling price?

• Use the following data for questions 3 & 4 -

units sold $100.000

consumer promotions $1,800,000

unit cost $40

personal selling 5 salespeople @ $80,000 each target return on sales 10% dealer promotions $1,200,000 advertising $1,500,000 product development $700,000

3. Calculate the break-even price.

4. What would the selling price have to be to get the target return?

5. What other factors besides break-even should you consider before setting price?

Reference no: EM131160736

Questions Cloud

Advise thomas of any rights he may have in this situation : Advise Thomas, Michelle, Ali and Wang of any rights they may have in this situation and if Bill will be liable under the Tort of Negligence ONLY, giving full legal authority for your answers.

What are problems that lead to this development of pinnacle : What are the problems that lead to this development of pinnacle. How does this building promote community? the social context and etc. Features of this building, skygarden, oublic park and etc?

Advise the department of health about the following issue : advise the Department of Health and the federal government about the following issue.- The minister has argued that raising the tax on alcohol is the most effective way to reduce alcohol abuse in our society.

Organizational culture and climate play : 1. What special problems and crises can new ventures expect as they grow? Why do these occur? 2. What role does the organizational culture and climate play in a rapidly growing venture?

Calculate the break even price : Calculate the break-even price. - What would the selling price have to be to get the target return? - What other factors besides break-even should you consider before setting price?

What is the new equilibrium $/£ exchange rate : If the U.S. interest rate also remains constant, what is the new equilibrium $/£ exchange rate?

Reverse chronological resume or a functional resume : Select a position that you might like to apply for from a career search website of your choosing. This can be a job that you are qualified for now or will be qualified for after earning your degree. Refer to Ch. 11 of Workplace Writing and choose ..

Discuss its impact on health care on a global scale : One can argue that technological advances have accelerated more in the last 50 years than in any other time in mankind's history. Identify one and discuss its impact on health care on a global scale

Generic strategies with business examples : Compare and contrast blue ocean strategy and porter generic strategies with business examples?

User Account

All Pages