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Homework answers / question archive / BEP = Fixed Cost Unit Price - Unit Variable Cost Using the Break Even Point Formula listed above, complete a break even analysis for the following scenario: Touché Toiletries, Inc
BEP = Fixed Cost Unit Price - Unit Variable Cost Using the Break Even Point Formula listed above, complete a break even analysis for the following scenario: Touché Toiletries, Inc., has developed an addition to its Lizardman Cologne line tentatively branded Ode d'Toade Cologne. Unit variable costs are 45 cents for a 3-ounce bottle, and heavy advertising expenditures in the first year would result in total fixed costs of $900,000. Ode d'Toade Cologne is priced at $7.50 for a 3- ounce bottle. How many bottles of Ode d'Toade must be sold to break even? Suppose that marketing executives for Touché Toiletries reduced the price to $6.50 for a 3-ounce bottle of Ode d'Toade and the fixed costs were $1,100,000. Suppose further that the unit variable cost remained at 45 cents for a 3-ounce bottle. (a) How many bottles must be sold to break even? (b) What dollar profit level would Ode d'Toade achieve if 200,000 bottles were sold?
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