B2210 Introduction to Marketing Tactics Solutions to Pricing Questions Question 1: Cat Harbour Fixed Costs = $200,000 Selling Price = $250 Variable Costs = $200 Sales (expected) = $1,250,000 a) B/E Quantity = FC/ (SP – VC) = 200,000/ (250-200) = 4,000 units b) B/E ($) = 4,000 units x $250 = $1,000,000 c) Expected profit if sales reach $1,250,000 • How many units are we selling at this sales level? = $1,250,000/$250 = 5,000 units Profit = 1,000 units sold above the breakeven…
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