Assume that you are in charge of pricing for a firm that produces pickles. You have fixed costs of $2,000,000. Variable costs are $0.75 per jar of pickles. You are selling your product to retailers for $0.89. You sell the pickles in cases of 24 jars per case.
a. How many jars of pickles must you sell to break even?
b. How much must you sell in dollars to break even?
c. How many jars of pickles must you sell to break even plus make a profit of $300,000?
d. Assume a retailer buys your product for $0.89. His business requires that he prices products with a 35 percent markup on cost. Calculate his selling price.
e. Assume you have an MSRP of $1.39 for the pickles. If a….