Determine the break-even point in dollar sales

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Reference no: EM131882670

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An agribusiness firm is trying assess its chances for success in a new market. Market research has estimated they will sell $18 million of the product when the price is $300 per pallet. The average variable cost is $225 per pallet. The plant needed to service this market will require an investment of $3 million.

1: Determine the break-even point in dollar sales

2: Using the information given above, determine the minimum annual dollar sales needed to make a 5 percent profit in this market.

3: Determine the proper mark-up percentage for this product.

4: Determine the minimal increase in dollar sales needed to breakeven on an advertising program for this product that requires a $500,000 outlay

5: If the firm chose make the product a loss leader (sell at zero profit--breakeven), and sold 50,000 pallets of product, what price should they charge?

Reference no: EM131882670

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