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12 January, 16:41

A local pet store, Roscoe's Rascals, which has concentrated on selling puppies, is considering adding a line of pet food. A contractor estimates that it will cost $10,000 to convert some storage space into a retail area for the food. Roscoe's Rascals will purchase the specialty food for $15 and sell it for $30. Marketing research indicates that the store will sell 900 bags. Should Roscoe's Rascals add pet food to its products?

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  1. 12 January, 17:03
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    yes because the break even quantitiy is less than the predicted sales.

    Explanation:

    Break even quantity = 10,000 / (30 - 15)

    = 667

    Predicted sales = 900

    So break even quantity is less than predicted sales.

    Therefore, yes because the break even quantitiy is less than the predicted sales.
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