Last year Minden Company introduced a new product and sold $25,400$ units of it at a price of $$95$ per unit. The product's variable expenses are $$65$ per unit and its fixed expenses are $$837,900$ per year.

Required:

$1.$ What was this product's net operating income $($loss$)$ last year?

$2.$ What is the product's break$-$even point in unit sales and dollar sales?

$3.$ Assume the company has conducted a marketing study that estimates it can increase annual sales of this product by $5,000$ units for each $$2$ reduction in its selling price. If the company will only consider price reductions in increments of $$2($e$.$g$.,$ $$68,$ $$66,$ etc.$),$ what is the maximum annual profit that it can earn on this product? What sales volume and selling price per unit generate the maximum profit?

$4.$ What would be the break$-$even point in unit sales and in dollar sales using the selling price that you determined in requirement $3?$

Answer rating: 100% (QA)

To answer the questions well go step by step 1 To calculate the net operating income loss for last year Net Operating Income Unit Sales Unit Price Uni... View the full answer