Examlex

Solved

Waterside Company Sells Two Products, Yellow Models and Striped Models

question 80

Multiple Choice

Waterside Company sells two products, Yellow models and Striped models. Yellow models sell for $50 per unit with variable costs of $30 per unit. Striped models sell for $60 per unit with variable costs of $25 per unit. Total fixed costs for the company are $20,000. Waterside Company typically sells one yellow model for every three striped models. What is the break-even point in total units?


Definitions:

Skimming Strategy

A pricing strategy where a company sets relatively high prices at the launch of a new product to maximize profits from customers willing to pay a premium.

Bundle Packaging

The practice of selling multiple products or services together as a single package deal.

Demand-Oriented

A pricing strategy where price is set based on consumer demand, with higher prices when demand exceeds supply and lower prices when demand is low.

Customary Pricing

A pricing strategy where the price is set based on what is traditionally expected or accepted by the market for a product or service.

Related Questions