Marketing Ch. 18

Marketing Ch. 18 - 278,000+214,000 = 10,250 units 48 5a....

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Sarah Anderson Marketing Written Ch. 18 David Smith Page 636: Projects & Teamwork; Questions 4, 5a & 5b 4. Webtech Development of Nashville, TN, is considering the possible introduction of a new product proposed by its research and development staff. The firm's marketing director estimates the product can be marketed at a price of $70. Total fixed cost is 278,000, and average variable cost is calculated at $48. a. What is the breakeven point in units for the proposed product? 278,000 = 5791.7 units 48 b. The firms CEO has suggested a target profit return of $214,000 for the proposed product. How many units must be sold to both break even and achieve this target return?
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Unformatted text preview: 278,000+214,000 = 10,250 units 48 5a. Which of the proposed selling prices would generate a profit for Cyber Novelties? $8, $15, $24 5b.Cyber Novelties' director of marketing also estimates an additional 0.50 per-unit allocation for extra promotion will produce the following sales increases: Indicate the feasible range of prices if this proposal is implemented and results in the predicted sales increases. 60,000 units at an $8 unit selling price; 28,000 units at $10; 17,000 units at $15; 6,000 units at $20; 3,500 units at $24....
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This note was uploaded on 05/11/2011 for the course ECON 2000 taught by Professor Paulkivi during the Spring '11 term at Bemidji State.

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