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Stickco sells hockey sticks for $90, incurs variable costs of $50 per stick and has fixed costs of $35,000. Last year they sold 1,000 sticks. They are considering a 30% price decrease to move or sell more sticks. Assuming all the variable and fixed costs remain the same: (a) How many sticks do they need to sell to simply breakeven?
(b) What was their profit if they did sell 1,000 sticks?
(c) How much of a sales increase (%BE) would they need in order to generate the same profit, if they lower the price by 30%?
(d) Calculate the minimum unit change in sales volume to maintain the same amount of profitability (BE).
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