Question

If Largo Global Inc. decides to sell the Sustainable Deluxe Boxes at the price the CEO demands to maintain the same profit percentage as for Standard Boxes, do you think the new price calculated in Tab 4 is a viable option? Why is it important for LGI to know what their breakeven quantity is? Also indicate which other (non-numerical information) should be considered when deciding to pursue the Sustainable Deluxe Box option.

Answer 1

Largo Global Inc. should know their breakeven quantity to make informed pricing decisions. They should consider non-numerical factors when deciding to pursue the Sustainable Deluxe Box option.

Step-by-step explanation:

Based on the information provided, it is important for Largo Global Inc. (LGI) to know their breakeven quantity in order to make informed decisions about pricing and profitability. The breakeven quantity is the point at which the firm's revenue equals its total costs, resulting in neither profit nor loss. By knowing the breakeven quantity, LGI can determine if the new price calculated in Tab 4 for the Sustainable Deluxe Boxes is a viable option.

In addition to knowing the breakeven quantity, LGI should consider other non-numerical information when deciding to pursue the Sustainable Deluxe Box option. This may include factors such as customer demand for sustainable products, the competitive landscape, potential marketing opportunities, and the company's overall sustainability goals and values.