A firm is selling two products—chairs and bar stools—each at $50 per unit. Chairs have a variable cost of $25, and bar stools $20. The fixed cost for the firm is $20,000.a. If the sales mix is 1:1 (one chair sold for every bar stool sold), what is the break-even point in dollars of sales? In units of chairs and barstools?b. If the sales mix changes to 1:4 (one chair sold for every four bar stools sold), what is the break-even point in dollars of sales? In units of chairs and barstools?

A firm is selling two products—chairs and bar stools—each at $50 per unit. Chairs have a variable cost of $25, and bar stools $20. The fixed cost for the firm is $20,000.a. If the sales mix is 1:1 (one chair sold for every bar stool sold), what is the break-even point in dollars of sales? In units of chairs and barstools?b. If the sales mix changes to 1:4 (one chair sold for every four bar stools sold), what is the break-even point in dollars of sales? In units of chairs and barstools?

Marketing

20th Edition

ISBN:9780357033791

Author:Pride, William M

Publisher:Pride, William M

Chapter19: Pricing Concepts

Section: Chapter Questions

Problem 6DRQ

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A firm is selling two products, chairs and bar stools, each at $50 per unit. Chairs have a variable cost of $25, and bar stools $20. Fixed cost for the firm is $20,000. If the sales mix changes to 1. 4 (one chair sold for every four bar stools sold) what is theb break-evenpoint in dollars of sales? In units of chairs and bar stools?
A firm is selling two products, chairs and bar stools, each at $50 per unit. Chairs have a variable cost of $25, and bar stools $20. Fixed cost for the firm is $20,000. If the sales mix is 1:1 (one chair sold for every bar stool sold), what is the break even point in dollars of sales? In units of chairs and bar stools?
A book publisher has fixed costs of $300,000 and variable costs per book of $8.00. The book sells for $23.00 per copy.a. How many books must be sold to break even?b. If the fixed cost increased, would the new break-even point be higher or lower?c. If the variable cost per unit decreased, would the new break-even point be higher or lower?
You are the operations manager for a production company. You are given the technical rate of substitution between factors X2 and X1 as -4. If you will like to produce the same output but you want to decrease the use of X1 by 2 units since it cost more than X2 to acquire, how many additional units of X2 will be required?
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“How many dozen should I put in the proofer?” asked Elizabeth, the new baker at the Sands Cafeteria. Rami El‐Hussieny was the day shift operations manager, and, unfortunately, he did not know how to answer Elizabeth's question. What she wanted to know was simple enough: How many dozen rolls should be placed in the proofer in anticipation of the night's dinner business? The problem was that the frozen dinner roll dough used at the Sands Cafeteria needed to be proof for at least 2 hours prior to being baked for 15 minutes. If too many rolls were proofed, they would never be needed, but they would still have to be baked and made into bread dressing or even tossed out. If too few dozen were proofed and the night was busier than anticipated, they would run out of “Fresh Baked Rolls” (one of the restaurant's signature items), and Rami knew that the night manager would be really upset. It was a daily guess, and sometimes Rami missed the guess! He wondered if a prebaked roll with a shelf life…
Assume a fixed cost of $900, a variable cost of $4.50, and a selling price of $5.50.a. What is the break-even point?b. How many units must be sold to make a profit of $500.00?c. How many units must be sold to average $0.25 profit per unit? $0.50 profit per unit? $1.50 profit per unit?
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39 The Svenson Furniture Company sells a popular coffee table that comes unassembled and includes three baskets to into the lower part of the assembled table. The percentage of good quality tables is 80%. It costs $32.00 to manufacture one table. Of the defective tables, 70% can be reworked at an additional cost of $9. If the company wants to yield 120 units per week, how many tables should they plan to build per week? Round to the nearest whole number to achieve this goal.