Assignment: MARKETING PRINCIPLES
Often a firm will calculate the break-even point for a price. That is, if we set the price at $X, then how many units will we need to sell to cover costs (that is, our break-even point). Work through the following data and questions to gain a better understanding of this approach.
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No. of Units
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Allocated Fixed Costs
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Variable Cost/Unit
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Total Production Cost
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Average Unit Cost
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Unit Price
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Total Sales Revenue
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Gross Profit
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500
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$10,000
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$10
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1,000
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$10,000
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$10
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|
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1,500
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$10,000
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$10
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2,000
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$10,000
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$10
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|
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2,500
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$10,000
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$10
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QUESTIONS
1. Start by completing the above table under the assumption that the product will be sold for $30. (It will be easiest to use Excel to complete the table.) How many units need to be sold to break-even at a product price of $30?
2. Now recalculate the table under the assumption that the product will be sold for $15. How many units need to be sold to break-even at a product price of $15?
3. What do you think you would set first: the sales target or the price? Why?
Format your assignment according to the following formatting requirements:
1. The answer should be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides.
2. The response also includes a cover page containing the title of the assignment, the student's name, the course title, and the date. The cover page is not included in the required page length.
3. Also include a reference page. The Citations and references should follow APA format. The reference page is not included in the required page length.
Attachment:- Break-Even.rar