A company has fixed costs of $300,000 and a variable cost of $10 per unit. If the company sells its product for $20, what is the break-even volume in units?
Explanation
Break-even analysis is a key pricing tool used to determine the sales volume at which a company's total revenues equal its total costs, resulting in neither a profit nor a loss.
Other questions
According to the narrowest definition, what is price?
What is the unique characteristic of price within the marketing mix?
What factor sets the ceiling for a product's price, according to the major considerations in setting price?
Which pricing strategy is product-driven, starting with designing a good product and setting a price that covers costs plus a target profit?
Offering the right combination of quality and good service at a fair price is characteristic of which pricing strategy?
What strategy involves attaching features and services to differentiate a company's offers and support higher prices, rather than cutting prices to match competitors?
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If a manufacturer's unit cost for a product is $16 and they want to achieve a 20 percent return on sales, what would be the markup price?
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What is the primary goal of competition-based pricing?
In the Caterpillar bulldozer example, what was the total value-added price for the bulldozer before the discount was applied?
Which type of market is characterized by many buyers and sellers trading over a range of prices rather than a single market price, allowing for differentiation?
What does a typical demand curve illustrate?
If demand for a product changes greatly with a small change in price, the demand is considered to be what?
What is the primary motivation for companies to use target costing?
In a market characterized by pure competition, how much time do sellers typically spend on marketing strategy?
Which of these is an example of an internal factor affecting a company's pricing decisions?
In a market characterized by oligopolistic competition, what is the nature of the sellers?
What was the response of many consumers to the Great Recession of 2008-2009, which has persisted even after the economy strengthened?
Why do smart managers often embrace pricing instead of treating it as a problem?
In the context of pricing strategies, what does EDLP stand for?
A retailer that frequently runs sales promotions, early-bird savings, and offers bonus earnings for store credit-card holders is practicing which type of pricing?
What is the primary driver for a company to pursue a cost-based pricing strategy?
The experience curve, or learning curve, describes what phenomenon?