See-Clear Optics is considering producing a new line of eyewear. After consideri
ID: 438826 • Letter: S
Question
See-Clear Optics is considering producing a new line of eyewear. After considering the costs of raw materials and the cost of some new equipment, the company estimates fixed costs to be $61,000 with a variable cost of $50 per unit produced. (a) If the selling price of each new product is set at $101, how many units need to be produced and sold to break even? units (Round up your answer to 0 decimal place.) (b) If the selling price of the product is set at $80 per unit, See-Clear expects to sell 2,030 units. What would be the total contribution to profit from this product at this price? $ (c) See-Clear estimates that if it offers the product at the original target price of $101 per unit, the company will sell about 1,640 units. Will the pricing strategy of $101 per unit or $80 per unit yield a higher contribution to profit? $80 per unit Both pricing strategies will yield equal contribution to profit. $101 per unitExplanation / Answer
Total revenue - total cost = (80*2000)-(40000+45*2000)=$30,000
c. See-Clear estimates that if it offers the product at the original target price of $100 per unit, the company will sell about 1500 units. Will the pricing strategy of $100 per unit...
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