Braun Schiffer is a maker of high-quality audio speakers. It is on the verge of launching a new
range of high-powered, yet extremely compact, speakers. The fixed overhead costs for
production of these speakers is estimated at $400,000.
The costs producing a single unit is $200.
The company prices these speakers at $400. The sales forecast projects that 1,800 units will be
sold by the end of the first year, 4,200 more in the second year, and 2,500 during the third year
after launch. At what point of time is the company most likely to break even?
A) twelve months B) eighteen months
C) fifteen months D) six months
A
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