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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%)

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