Explain how many sets will it have to sell at price obtaine

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Reference no: EM1371368

Q. Writers' Pleasure, Inc. produces gold-plated pen and pencil sets. It has a fixed annual cost of $50,000 and average variable cost is $20. It expects to sell 5,000 sets next year.

a. In order to just break even, explain how much will company have to charge for each set?

b. Based on its plant investment, company requires an annual profit of $30,000. Explain how much will it have to charge per set to obtain this profit? (Quantity sold will still be 5,000 sets.)

c. If company wants to earn a mark-up of 50 percent on its variable costs, explain how many sets will it have to sell at price obtained in part b?

Reference no: EM1371368

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