Suppose that Dove is introducing a new soap (Dove Natural) and expects the following: a cannibalization rate of 10% on units. The revenues of Dove soap are $10,000,000. Dove Natural expects $5,000,000 in new ad buys and an increase of $2,000,000 in Selling, General and Administrative Costs. Assume that Dove sells their soap at a price of $2 per bar and the cost is $0.50 per bar. Suppose that Dove sells Dove Natural at a price of $4 per bar and the cost is $1.50 per bar. How many bars of soap would Dove Natural have to sell to break even? ( Please show your work)

Suppose that Dove is introducing a new soap (Dove Natural) and expects the following: a cannibalization rate of 10% on units. The revenues of Dove soap are $10,000,000. Dove Natural expects $5,000,000 in new ad buys and an increase of $2,000,000 in Selling, General and Administrative Costs. Assume that Dove sells their soap at a price of $2 per bar and the cost is $0.50 per bar. Suppose that Dove sells Dove Natural at a price of $4 per bar and the cost is $1.50 per bar. How many bars of soap would Dove Natural have to sell to break even? ( Please show your work)

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter16: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 11E

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