Consider the information in Table 1 and answer the questions below (Please show all work):

a. What is the contribution margin per unit?

b. What volume must be sold for the company to break even on this product (both in units and dollar amounts)?

c. What is the volume that must be sold for the company to make a 25% profit from this product?

d. What is the break-even volume and dollar amount if management decides to run extra advertising and promotions during the holiday season that will cost $4,000,000?

e. What is the break-even volume if management decides to cut the price of the KeurigKold to $199?

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Overhead Expenses Raw materials Licensing expense Sales Commission Sales Price $3,000,000 $85/unit 2% of sales price/unit 10% of sales price/unit $329 Labor Sales salaries Advertising and promotions Past R&D Expense Product Packaging $48/unit $550,000 $3,200,000 $2,000,000 $8.47/unit Overhead Expenses Raw materials Licensing expense Sales Commission Sales Price $3,000,000 $85/unit 2% of sales price/unit 10% of sales price/unit $329 Labor Sales salaries Advertising and promotions Past R&D Expense Product Packaging $48/unit $550,000 $3,200,000 $2,000,000 $8.47/unit

Answer rating: 100% (QA)

a Contribution margin sales price per unit total variable costs per unit Contribution margin 329 85 2 x 329 10 x 329 48 847 329 85 658 329 48 847 329 ... View the full answer