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What is the break-even price for the item

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Reference no: EM131344921

Last year, a manufacturer created a new item that was a huge success. The company invested 2.5 million for a plastic injection molding machine (which can be sold for 2.0 mill) and 100,000 in plastic injection molds specifically for the toy. Labor and the costs of materials needed to make each item is about $3. This year, a competitor has created a similar item that has reduced demand significantly for the original item. Now, the initial manufacturer is deciding whether they should continue production of the item or not. If the estimated demand is 100,000 items, what is the break-even price for the item?

Reference no: EM131344921

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