The Limited is planning a new line of leather jean jackets for fall. It plans to retain the jackets for $100. It is having the jackets produced in the Dominican Republic. Although The Limited does not own the factory, its product development and design costs are $400,000. The unit variable cost of the jacket, including transportation to the stores, is $45. For this line to be successful, The Limited needs to make $900,000 profit. Show ALL you work.
a) What is its break-even point (i) in units and (ii) in dollars?
b) The buyer has just found out that The GAP, one of The Limited's major competitors, is bringing out a similar jacket that will retail for $90. If The Limited wishes to match The GAP's price, how many additional units will it have to sell?
1. Mall kiosk operator, Manny Perez, bought a tie for $9 and priced it to sell for $15. What was his markup %: (a) on the selling price, and (b) on cost? (Must show all workings, line by line).