Bob is planning to expand her business by taking on a new product. She can purchase the new product for $8. To market this new product, she would need to spend $984 on advertising each month. The suggested retail price for the product is $14, but she is not sure if she should price her product at this amount. Answer each of the following independent questions. a) If she chooses a price of $14, how many units does she need to sell to break even? b) If she chooses a price of $12, how many units does she need to sell to break even? c) If she spends $1500 on advertising, and keeps the price at $14, how many units does she need to sell to break even? d) If she estimates that she can sell 300 units when she spends $1500 for advertising, what is the lowest price she could charge and still break even?

Step-by-step explanation:To determine the number of units Bob needs to sell to break even at different prices and advertising costs, we can use the following formula:

Break-even quantity = Fixed costs / (Selling price - Variable cost)

1. If Bob prices the product at $14:

a) Break-even quantity = $984 / ($14 - $8) = $984 / $6 = 164 units

2. If Bob prices the product at $12:

b) Break-even quantity = $984 / ($12 - $8) = $984 / $4 = 246 units

3. If Bob spends $1500 on advertising and keeps the price at $14:

c) Break-even quantity = $1500 / ($14 - $8) = $1500 / $6 = 250 units

4. If Bob estimates she can sell 300 units when spending $1500 on advertising, the lowest price she could charge and break even can be found by rearranging the formula:

d) Selling price = Variable cost + Fixed costs / Units sold

Selling price = $8 + $1500 / 300 = $8 + $5 = $13

Therefore, if Bob spends $1500 on advertising and sells 300 units, the lowest price she could charge and still break even is $13 per unit.