We are going to make and sell footballs. The footballs sell for $80 each. The variable...

We are going to make and sell footballs. The footballs sell for $80 each. The variable costs of making the footballs are $55. Our factory fixed costs are $14,000 per month.

Use this information for the following questions.

What is our current breakeven in units?

We are fortunate because Patrick Mahomes has agreed to endorse our footballs and his signature will be on each football. This will enable us to increase our price by $25. We will pay a $1,000 endorsement fee per month to Patrick Mahomes. The variable costs will be unchanged. What is our new breakeven in units?

Assume the deal with Patrick Mahomes doesn't go through so the original situation applies.

We will buy an advertising campaign for $400. If that increases sales by $10,000, by how much does the advertising campaign increase our overall net income?

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ekkarill92 answered 2 years ago

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We are going to make and sell footballs. The footballs sell for $80 each. The variable...

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