+598 The item in question at a unit selling price of $100. Red River’s forecast volume of sales for the first year is 8000 units. The annual fixed cost for adding this product to the inventory is estimated to be $200,000. Also variable cost per unit is $60.
Total Cost = $680,000
If Mr. Lee has sold 4500 units at $100 when his competitor decides to sell the product at a sale price of $90, will Mr. Lee be able to match this price and still have a net income of $100,000?
Thanks any help would be greatly appreciated.
