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Calculate the sales price assuming an estimated demand

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Reference no: EM131956011

Problem

Panoramic Paddleboards is considering the production of a new, sleeker designed paddleboard. They will price it at a 30% markup. Variable cost per board is estimated at $110. Annual total fixed costs per year will be $58,000.

a. Calculate the sales price assuming an estimated demand of 1,200 boards

b. Calculate the sales price assuming an estimated demand of 800 boards.

c. Explain the difference and discuss why this method creates a circular problem for the manufacturer.

Reference no: EM131956011

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