Units must be produced-sold per year in order to break even

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Richard Winchester, owner of Winchester Products, is considering introducing a new product which will require $45,000 in fixed costs per year. Winchester estimates the variable costs of each unit produced at $13. a) If the unit selling price is set at $19, how many units must be produced and sold per year in order to break even? Solve both graphically and algebraically. b) How many units must be sold for a selling price of $19 to realize a profit of $15,000? c) Winchester forecasts sales of 9,500 units for the first year if the selling price is set at $19, and 11,000 units if the selling price is set at $18. Which pricing strategy would you recommend to Winchester? Why?

Reference no: EM131027382

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