Reference no: EM133148706

Question - As part of your competitive analysis, you notice that at Digby Corporation the Promo and Sales budgets of the Daft product are pretty low. You wonder how doubling Daft's Sales and Promo budget next year will increase demand--and aversely affect your sales. Examine the profitability of this scenario to Digby. For simplicity, assume the following: - Price remains unchanged at $18.00. - Variable costs reported on the Production Analysis Report remain constant: material stays at $6.26/unit and labor at $2.34/unit. - Promo and Sales budgets double from $1,050,000 and $1,000,000 respectively. - No inventory carry costs. - All other period costs are the same as reported on last year's Annual Report. Estimate how many units of Daft would have to be sold to reach break even.