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| Topic: |
Business
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| Number of pages / Number of words: |
3 / 773 |
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In order to determine whether the price is the best or not we will do the breakeven analysis.
After distributing the fixed cost and expenses using the proportion of every category, the calculation of the breakeven point suggests that Veloplus should be selling at least 486 unit of the competition model at the price $ 795 in order to not lose money by selling them...
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The remaining prices on the list are $ 760 and $ 835 but before setting any of these prices for the competition model it is required to test whether these new prices and their projected volumes will cover the fixed costs.
As expected, the price of $760 is not enough to cover the fixed costs related to the competition model because the price was lower than the current price and the increase on volume is only 10 units...
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