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# WebTech Development of Austin, Texas, is considering the possible introduction of a new product proposed by its research and development staff

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1. WebTech Development of Austin, Texas, is considering the possible introduction of a new product proposed by its research and development staff. The firm’s marketing director estimates the product can be marketed at a price of \$70. Total fixed cost is \$278,000, and average variable cost is calculated at \$48.
1. What is the breakeven point in units for the proposed product?
• The firm’s CEO has suggested a target profit return of \$214,000 for the proposed product. How many units must be sold to both break even and achieve this target return?
•  Consider a product with an invoice of \$1.87 and a selling price of \$4.99.
1. Calculate the Markup percentage on selling price
• Calculate the Markup percentage on cost
• A consumer purchases a toaster from a retailer for \$19.99.  The retailer’s markup is 30%, and the wholesaler’s markup is 10%, both based on selling price.  For what price does the manufacturer sell the product to the wholesaler?

Cost at each level = price – (price X markup%)