Herzig Industries Sells Two Electrical Components with the Following Characteristics

question 184

Essay

Herzig Industries sells two electrical components with the following characteristics.Fixed costs for the company are $200,000 per year. Required:
a.How many units of each product must Herzig Industries sell in order to break even?
b.Herzig's vice president of sales has determined that due to market changes, the sales price of component XL-709 can be increased to $14.00 with no impact on sales volume.What will be Herzig's new breakeven point in units?
c.Returning to the original information, Herzig's vice president of marketing believes that spending $80,000 on a new advertising campaign will increase sales of component CD-918 to 80,000 units, without affecting the sales of product XL-709.How many units of each product must Herzig sell to break even under this new scenario?

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Definitions:

Histogram

A graphical representation of the distribution of numerical data, typically showing the number of data points that fall within a range of values, divided into bins or intervals.

Simulation

The act of mimicking the operation of a real-world process or system over time, often via computer models.

Central Limit Theorem

A fundamental theorem in statistics stating that the distribution of sample means approaches a normal distribution as the sample size increases, regardless of the population's distribution.

Normal Distribution

A bell-shaped frequency distribution curve, where most of the occurrences take place around the central peak and probabilities for values taper off equally on both sides.