Your next task is to provide a pricing recommendation for the bookshelf system. The product comes with five equal-length finished walnut shelves and the hardware to hang the shelves. When assembled, the shelves look like they are floating on the wall. The product strategy team suggests taking into consideration the break-even point in determining the bookshelf system's price. You ask Conner about expectations around this product. He says, "The bookshelf system is a popular item. I expect around 2,500 units to be sold this year." Production informs you that the variable costs are $50/unit. Fixed costs are $150,000. What price point do you recommend for the bookshelf system

Sales Price Per Unit = $ 110

Explanation:

Break Even Sales Volume in Dollars  =

Break Even Sales Volume in Dollars= Fixed Costs/ 1- (variable Costs/ Sales)

Break Even Sales Volume in Units = Fixed Costs/ Contribution Margin per Unit

On Rearranging the above given formula

Contribution Margin per Unit = Fixed Costs/ Break Even Sales Units

Sales Price per Unit  - Variable Price Per unit =$150,000/2500

Sales Price Per Unit - $ 50= 60

Sales Price Per Unit = 60+ 50= $ 110

1) the stages a new product goes through from beginning to end, i.e., the stages that a product passes through from introduction through growth, maturity, and decline. 2) the time from initial research and development to the time at which sales and support of the product to customers are withdrawn. 3) the period of time during which a product can be produced and marketed profitably.

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