In the year just ended, a small appliance manufacturer sold its product at the wholesale price of $37.50. The unit variable costs were $13.25, and the monthly fixed costs were $5,600.
a) If unit variable costs are expected to rise to $15.00 and fixed costs to $6,000 per month for the next year, at what amount should the product be priced in order to have the same break-even volume as last year?
b) What should be the product's price in order to have the same profit as last year on sales of 300 units per month in both years?

Question

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The Answer of In the year just ended, a small appliance manufacturer sold its product at the wholesale price of $37.50. The unit variable costs were $13.25, and the monthly fixed costs were $5,600.
a) If unit variable costs are expected to rise to $15.00 and fixed costs to $6,000 per month for the next year, at what amount should the product be priced in order to have the same break-even volume as last year?
b) What should be the product's price in order to have the same profit as last year on sales of 300 units per month in both years?

In the Year Just Ended, a Small Appliance Manufacturer Sold