A producer of felt-tip pens has received a forecast of demand of 30,000 pens for the coming month from its marketing department. Fixed costs of $25,000 per month are allocated to the felttip operation, and variable costs are 37 cents per pen.a. Find the break-even quantity if pens sell for $1 each.b. At what price must pens be sold to obtain a monthly profit of $15,000, assuming that estimated demand materializes?
A producer of felt-tip pens has received a forecast of demand of 30,000 pens for the coming month from its marketing department. Fixed costs of $25,000 per month are allocated to the felttip operation, and variable costs are 37 cents per pen.a. Find the break-even quantity if pens sell for $1 each.b. At what price must pens be sold to obtain a monthly profit of $15,000, assuming that estimated demand materializes?
Chapter19: Pricing Concepts
Section: Chapter Questions
Problem 6DRQ
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A producer of felt-tip pens has received a
a. Find the break-even quantity if pens sell for $1 each.
b. At what price must pens be sold to obtain a monthly profit of $15,000, assuming that estimated demand materializes?
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