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?

---

Definitions:

Depreciation

The process by which capital assets lose value over time due to use, wear and tear, or obsolescence.

Depreciation

The process through which an asset loses value over time due to use, wear and tear, or obsolescence.

Terms of Trade

The ratio at which a country's exports exchange for its imports, influencing the country's economic health.

U.S. Dollar

The official currency of the United States, widely used as a benchmark in international trade and financial transactions.