The Global Sports Center is contemplating producing a new pair of mountain climb

Question

The Global Sports Center is contemplating producing a new pair of mountain climbing boots that would sell for $100 per pair. The per-unit variable cost is $60 and the fixed cost per year allocated to this product is $400,000. The manager estimates that annual sales of this product would have a normal distribution with mean of 14,000 units with a standard deviation of 3,000 units. a) What is the breakeven point? b) What is the probability of at least breaking even? c) What volume must be sold to obtain a profit of $150,000? d) What is the profit when 12,000 pairs are sold? e) If the company has decided to produce the boots if the probability of a profit of $50,000 or more is 90% or higher, what should they do? Base your answer on a probability. Please show me how u got the answers, thank u

Explanation / Answer

a)10,000 units is breakeven point.($40 profit per shoe*10000 shoes = $400,000) b)I forget how to do the normal dist calculations c)13,750 units to get $150,000 profit($40 profit per shoe*13750 shoes = $550,000) d)$80,000($40 profit per shoe*12000 shoes = $480,000 then subtract $400000 fixed cost) e)No, will be less than a standard deviation away which is less than 90% but i don't know the exact number.

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.