price

Kitchenaid is considering expanding its countertop microwave line to include a new “smart” microwave that connects to other smart devices. The “smart” microwave will require additional expenditures both in manufacturing and marketing. Management seeks to determine a preliminary price for the new microwave. The fixed costs associated with manufacturing the microwave are $3,000,000. The variable costs are $410.50 per unit. Calculate the breakeven point in units at selling prices of $599.00, $699.00 and $799.00. Show your work. Through your research you know that “smart” devices are growing in popularity and that several key competitors are working on their own “smart” microwaves. Currently, there is no clear market leader in this emerging market for “smart” kitchen appliances. It is estimated that the total market for smart microwaves in the next year is 125,000 units. Which of these prices would you recommend and why? Please give a detail explanation for your decision