Blaster Radio Company Is Trying to Decide Whether or Not

question 119

Essay

Blaster Radio Company is trying to decide whether or not to introduce a new model. If they introduce it, there will be additional fixed costs of $400,000 per year. The variable costs have been estimated to be $20 per radio.
a) If Blaster sells the new radio model for $30 per radio, how many must they sell to break even?
b) If Blaster sells 70,000 of the new radio model at the $30 price, what will the contribution to profit be?

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Definitions:

Transaction Selling

A sales approach focused on completing individual sales or transactions without necessarily building long-term customer relationships.

Customer Satisfaction

Customer satisfaction is a measure of how well a product or service meets or exceeds the expectations of the customer.

Relationship Selling

A sales approach focusing on building long-term relationships with customers rather than on one-time transactions.

Consultative Selling

A sales approach focusing on building a relationship with the customer, understanding their needs, and offering solutions that meet those needs.