Breakeven
(If you have trouble with this calculation and the textbook is insufficient, look back at the video I posted in Ch. 9 on pricing)
Given the assumptions below about the manufacture of Barbie dolls, answer the following two questions:
- How many Barbie dolls does Mattel need to sell to breakeven?
- If Mattel sells 2,000,000 Barbie dolls how much of a profit or loss will the company generate?
Fixed costs attributable to Barbie are $2,700,000
The variable cost of producing each doll is $1.50.
Average wholesale selling price of a Barbie doll is $3.75 (this is the price at which Mattel sells Barbie to Walmart)
(Do not consider any other Mattel product or any facts not presented here)
SHOW ALL CALCULATIONS
If you have trouble typing equations, you can hand write this assignment (neatly) and then scan and upload into Blackboard.
