1 d and e

and 2

1. Squiggle, a ballpoint pen manufacturing start-up, estimates the following costs: Plastic and Metal Parts $0.12 per pen Ink $0.01 per pen Direct Labour $0.02 per pen 1 Selling Price $0.40 per pen Advertising $80,000 Managerial and Admin $200,000 Sales Commissions 10% of Selling Price Factory Overhead $140,000 There is an estimated market for 10 million ballpoint pens of this grade. Calculate: a) Unit Contribution b) Breakeven volume in units. c) Market share necessary to break even, d) Total profit for the company if 3 million pens are sold, and e) Volume needed to generate $525,000 in profits. 2. Dave House, an engineer and entrepreneur, is evaluating the feasibility of manufacturing a line of self-sealing stem bolts in the unused space at his existing flux capacitor factory. The factory can produce 1 million units of the bolts. Fixed costs associated with the bolts are $2 million and the maximum selling price is $10 a unit. If variable costs are 85% of the selling price, should Dave pursue this iden? 3. Joe Podivinski, 19, needs a job to cover part of his university tuition next year. He is looking to raise $7,200 over the summer towards this goal. Acme Vacuum Company would hire him to sell robotie vacuum cleaners door-to-door. The company estimates that Joe's variable costs per sale (including paying Acme for its vacuums) will amount to 70% of the selling price of the units. Joe's fixed costs for the summer, including rent and expenses, is $2,800. Acme estimates a keen salesperson can sell $30,000 of robotic Vacuum cleaners over the summer Joe also knows he can instead return to his union job in a manufacturing plant. Although his salary would be assured at that job, he would be able to save only $6.200 for tuition Which job should Joe take? What factors did you consider when making your decision? 4. Martin's Board Game Emporium sells games purchased from a wholesaler, who in turn buys them from a manufacturer. The wholesaler charges a 20% margin on its selling price, and Martin enjoys a modest 95% mark-up on cost. If the manufacturer sells the games for $20, what is Martin's selling price to customers