Executives of Studio Recordings, Inc. produced the latest compact disc by the Starshine Sisters Band, titled Sunshine
Question:
Executives of Studio Recordings, Inc. produced the latest compact disc by the Starshine Sisters Band, titled Sunshine /Moonshine. The following cost information pertains to the new CD:
CD package and disc (direct material and labor) .. $1.25/CD
Songwriters’ royalties .............. $0.35/CD
Recording artists’ royalties ............ $1.00/CD
Advertising and promotion ............ $275,000
Studio Recordings, Inc.’s overhead ........ $250,000
Selling price to CD distributor ............. $9.00
Calculate the following:
a. Contribution per CD unit
b. Break-even volume in CD units and dollars
c. Net profit if 1 million CDs are sold
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Related Book For
Cost management a strategic approach
ISBN: 978-0073526942
5th edition
Authors: Edward J. Blocher, David E. Stout, Gary Cokins
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