Olaf, a manufacturer of air fryers, realizes a cost of $250 for every unit it produces. Its total fixed costs equal $6 million. The company manufactures 400,000 units. 

What is the unit cost? 

What is the markup price if the company desires a 15% return on sales? Markup price = unit cost / (1 - desired return on sales) 

What is the ROI price if the company desires a 20% return on an investment of $2 million? ROI = unit cost + ROI x investments / unit sales.

Imagine that there is a product that has 5 million prospective buyers who purchase an average of 3 per year. If the price average is $15, what is the market potential?

Answer rating: 100% (QA)

Olaf Air Fryer Analysis Unit Cost Production cost per unit 250 Fixed cost per unit spre... View the full answer