Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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We have been asked to analyze our denim jeans line by price (from $24.99 to $36.99 by $1.00) and quantity (from 10,000
to 28,000 by 2,000).
Fixed Cost = $85,470
Material cost per pair = $7.44
Electricity cost per pair = $0.61 Labor cost per pair = $14.88
If we price the jeans at $29.99, how many pairs of jeans must we sell to have profits above $100,000?
18,000
22,000
26,000
28,000
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Transcribed Image Text:We have been asked to analyze our denim jeans line by price (from $24.99 to $36.99 by $1.00) and quantity (from 10,000 to 28,000 by 2,000). Fixed Cost = $85,470 Material cost per pair = $7.44 Electricity cost per pair = $0.61 Labor cost per pair = $14.88 If we price the jeans at $29.99, how many pairs of jeans must we sell to have profits above $100,000? 18,000 22,000 26,000 28,000
Expert Solution
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Concept

In this question first we will calculate the pairs of jeans that will be required to be sold at $ 29.99 to earn profit of $ 100,000. Hence to earn profits above $ 100,000, we have to sell pairs of jeans more than the pairs required to earn profits of $ 100,000. 

 

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