Marketing Problem

Marketing Problem - = 82031 units Now we have to find BE$:...

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Marketing Problem (Case # 2) a. Contribution per CD units =? Contribution per unit = selling price per unit – variable cost per unit But it is given that the selling price is per unit = $9 1.25 + 0.35 + 1 = 2.6 The contribution per unit = 9 – 2.6 = $ 6.40 per unit b) Breakeven volume =? BE volume = total fixed cost / selling price per unit – variable cost per unit BE volume = total fixed cost / contribution margin TFC = studio recording inc. overhead + advertising and promotion 250000 + 275000 = $525000 Contribution margin = $6.4 per unit Therefore BE volume = 525000 / 6.4
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Unformatted text preview: = 82031 units Now we have to find BE$: BE$ = total fixed cost / contribution % TFC = $525000 Contribution % = 9 2.6 / 9 = 0.71 BE$ = 525000 / 0.71 = $ 738281 c) Net profit if 1 million CDs are sold Cost = $9 * 1000000 525000 (2.6 * 1000000) = 9000000 525000 2600000 = $ 5875000 d) Necessary CD unit volume to achieve a $200000 profit =? If 1000000 units sold had a net profit of $ 5875000 then how many units should be sold to get $ 200000 525000 + 200000 / 6.4 = 113281 units...
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This note was uploaded on 01/09/2011 for the course EDS 103 taught by Professor White during the Spring '10 term at E. Kentucky.

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Marketing Problem - = 82031 units Now we have to find BE$:...

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