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What is the present yearly net operating income or loss

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Reference no: EM132502676

Minden Company introduced a new product last year for which it is trying to find an optimal selling price. Marketing studies suggest that the company can increase sales by 5,000 units for each $2 reduction in the selling price. The company's present selling price is $70 per unit, and variable expenses are $40 per unit. Fixed expenses are $540,000 per year. The present annual sales volume (at the $70 selling price) is 15,000 units.

Question 1. Determine what is the present yearly net operating income or loss?

Question 2. Determine what is the present break-even point in unit sales and in dollar sales?

Question 3. With the assumption that the marketing studies are correct, help me determine what is the maximum annual profit that the company can earn? At how many units and at what selling price per unit would the company generate this profit?

Question 4. Determine what would be the break-even point in unit sales and in dollar sales using the selling price you determined in (3) above (e.g., the selling price at the level of maximum profits)?

Reference no: EM132502676

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