Intentical Inc. manufactures game systems. Intentical has decided to create and market a new system with wireless
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1. Suppose the managers at Intentical price the Yew game system at $110 per unit. How many units do they need to sell to break even?
2. The managers at Intentical are thinking of two alternative pricing strategies.
a. Sell the Yew at $110 each from the outset. At this price, they expect to sell 1,500,000 units over its life cycle.
b. Boost the selling price of die yew in year 2 when it first comes out to $240 per unit. At this price they expect to sell 100,000 units in year 2. In years 3 and 4 drop the price to $110 per unit. The managers expect to sell 1,200,000 units in years 3 and 4.
Which pricing strategy' would you recommend? Explain.
3. What other factors should Intentical consider in choosing its pricing strategy?
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Related Book For
Cost Accounting A Managerial Emphasis
ISBN: 978-0133392883
6th Canadian edition
Authors: Horngren, Srikant Datar, George Foster, Madhav Rajan, Christ
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