Assignment:
A producer of felt-tip pens has received a forecast of demand of 30,000 pens for the coming month from its marketing department. Fixed costs of $25,000 per month are allocated to the felt-tip operation, and variable costs are 37 cents per pen. Explain and please provide the excel formulas.
a) Find the break-even quantity if pens sell for $1 each.
b) At what price must pens be sold to obtain a monthly profit of $15,000, assuming that estimated demand materialized?