Potential loss does not exceed the desired level

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Reference no: EM132017249

Spencer tools would like to offer a special product to its best customers. However the firm wants to limit its maximum potential loss on this product to the firms initial investments in the project. The fixed cost are estimated at $32,000, the depreciation expense is $9,700, and the contribution margin per unit is $9.85. What is the minimum number of units the firm should pre-sell to ensure it’s potential loss does not exceed the desired level?

Reference no: EM132017249

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