Assignment:
Problem
A producer of felt-tip pens has received a forecast of demand of 34,000 pens for the coming month from its marketing department. Fixed costs of $30,000 per month are allocated to the felt-tip operation, and variable costs are 36 cents per pen.
a. Find the break-even quantity if pens sell for $3 each.
b. At what price must pens be sold to obtain a monthly profit of $25,000, assuming that estimated demand materializes?