Herzig Industries sells two electrical components with the following characteristics.Fixed costs for the company are $200,000 per year. Required:
a.How many units of each product must Herzig Industries sell in order to break even?
b.Herzig's vice president of sales has determined that due to market changes, the sales price of component XL-709 can be increased to $14.00 with no impact on sales volume.What will be Herzig's new breakeven point in units?
c.Returning to the original information, Herzig's vice president of marketing believes that spending $80,000 on a new advertising campaign will increase sales of component CD-918 to 80,000 units, without affecting the sales of product XL-709.How many units of each product must Herzig sell to break even under this new scenario?

Question

Herzig Industries sells two electrical components with the following characteristics.Fixed costs for the company are $200,000 per year.  Required: 
a.How many units of each product must Herzig Industries sell in order to break even?
b.Herzig's vice president of sales has determined that due to market changes, the sales price of component XL-709 can be increased to $14.00 with no impact on sales volume.What will be Herzig's new breakeven point in units?
c.Returning to the original information, Herzig's vice president of marketing believes that spending $80,000 on a new advertising campaign will increase sales of component CD-918 to 80,000 units, without affecting the sales of product XL-709.How many units of each product must Herzig sell to break even under this new scenario?

Quizplus · Accepted Answer

The Answer of Herzig Industries sells two electrical components with the following characteristics.Fixed costs for the company are $200,000 per year.  Required: 
a.How many units of each product must Herzig Industries sell in order to break even?
b.Herzig's vice president of sales has determined that due to market changes, the sales price of component XL-709 can be increased to $14.00 with no impact on sales volume.What will be Herzig's new breakeven point in units?
c.Returning to the original information, Herzig's vice president of marketing believes that spending $80,000 on a new advertising campaign will increase sales of component CD-918 to 80,000 units, without affecting the sales of product XL-709.How many units of each product must Herzig sell to break even under this new scenario?

Herzig Industries Sells Two Electrical Components with the Following Characteristics