Question: Diamond Machine Technology makes a tool for sharpening the blades of pruning sheers and glass clippers. The company has invested $250,000 in developing this sharpener.

  1. Diamond Machine Technology makes a tool for sharpening the blades of pruning sheers and glass clippers. The company has invested $250,000 in developing this sharpener. This tool, which is about the size of a piece of chewing gum, costs $3 to make. Fixed costs for the sharpener is $10,000. The company expects to sell 100,000 sharpeners this year. Diamond Machine's markup on sales is 30 percent, and it wants to earn a 20 percent ROI. Calculate both its markup price and its target-return price as well as its breakeven volume at both prices. Which price should Diamond Manufacturing use and why?

Please put your final answers in this table

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Mark up price 11a

Target Return Price 11b

Break Even Volume Mark up price 11c

Break Even Volume Target Return Price 11c

Why? Please place here

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