Marketing Application Problem
- Bic is starting a new division that will be releasing a new pen that will be sold for $2.00 per unit. Below is the information about this new undertaking:
Selling Price: $2.00
Operating Expenses: $60,000
Lease $15,000
Depreciation $5,000
Executive Salaries $30,000
Property Taxes $10,000
Costs of goods sold = $.90 per unit
Raw Materials $.20
Labor $.30
Sales Commissions $.40
How many pens will Bic need to make just to break even?
- Bic finds that she is drawing 25% less than her break-even point. How do you suggest that she make up the difference. I am looking for data-driven ideas to specifically answer this question to actually quantify how she makes up the 25%.
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