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Baby Dolls Teddy Bears Toy Cars Volume 200,000 125,000 225,000 Sales Price $3.50 $2.75 $3.15 Variable Costs $2.05 $1.75 $2.45 Fixed Costs $65,000 $125,000 $35,000 Target pretax income= $0 Investment= $2 million Capacity=1 million units 1.Return to...

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Accounting

Baby DollsTeddy BearsToy Cars
Volume200,000125,000225,000
Sales Price$3.50$2.75$3.15
Variable Costs$2.05$1.75$2.45
Fixed Costs$65,000$125,000$35,000

Target pretax income= $0

Investment= $2 million

Capacity=1 million units

1.Return to the original assumptions. Now assume that, due tocompetition, Toddler Toys must cut prices on each of its threeproducts by 20%. In addition, a new advertising campaign costing$45,000 must be instituted to counteract bad publicity. Given theseassumptions, what is the new breakeven point?

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3.7 Ratings (396 Votes)
Baby DollsBaby DollsTeddy BearsToy CarsTotalVolume200000125000225000550000Sales    See Answer
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