Problem $5-19($Algo$)$ Break$-$Even Analysls; Priclng $[$LO$5-2,$ LO$5-4,$ LO$5-7]$

Last year Minden Company introduced a new product and sold $15,500$ units at a price of $$72$ per unit. The product's variable expenses

are $$42$ per unit and its fixed expenses are $$519,000$ per year.

Requlred:

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

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

Assume the company 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($e$.$g$.,$ $$70,$ $$68,$ etc.$).$

what is the maximum annual profit it can earn on this product? What sales volume and selling price per unit generate the maximum

profit?

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

Complete this question by entering your answers in the tabs below.

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