A leading manufacturer of video games is about to introduce four new games. The accompanying table
summarizes price and cost data, Combined fixed costs equal $600,000. A marketing research study predicts that
for each unit sold of Diablo, 2 units of Call of Duty: Modern Warfare, 3 units of Sekiro and 4 units of Starcraft II
will be sold.
Answers
Given : A leading manufacturer of video games is about to introduce four new games. price and cost data
To Find : How many product mix units must be sold to break even? b) How does it translate into sales of individual games?
Solution:
Game Selling price Variable Cost Profit $
Diablo 55 22 33
Call of Duty 48 17 31
Sekiro 33 12 21
Starcraft II 22 11 11
Let say unit sold of Diabolo = x
Then Call of Duty = 2x
Sekiro = 3x
Starcraft II = 4x
Total units sold = 10x
Profit = 33x + 31(2x) + 21(3x) + 11(4x) - Fixed Cost
= 33x + 62x + 63x + 44x - 600000
= 202x - 600000
For break even : 202x = 600000
=> x = 2,970.3 ≈ 2,971.
=> 10x = 29703 ≈ 29710
unit sold of Diabolo = 2971
Then Call of Duty = 5942
Sekiro = 8913
Starcraft II = 11884
Learn More:
For the following, perform a break-even analysis showing ...
https://brainly.in/question/13328944
Q. By considering the Particulous as mentioned:-fixed cost-1.5 Lakh ...
https://brainly.in/question/13282320
For the following, perform a break-even analysis showing ...
https://brainly.in/question/13327048
A leading manufacturer of video games is about to introduce four new games. The accompanying table summarizes price and cost data, Combined fixed costs equal $600,000. A marketing research study predicts that for each unit sold of Diablo, 2 units of Call of Duty: Modern Warfare, 3 units of Sekiro and 4 units of Starcraft II will be sold.
Games
Diablo
Call of Duty
Sekiro
Starcraft II
Selling Price (in dollars)
55
48
33
22
Variable cost/unit (in dollars)
22
17
12
11
How many product mix units must be sold to break even?
How does it translate into sales of individual games