1.

• What is your unit contribution?

Cathy's Computer Software Company sells computer software to large medical offices that helps them with their patient records and billing. Your marketing department has provided the following information: The total market for software of this type is 2,000 units per year. The average price per unit for the software package is $5,000 The average costs associated with the software production include: $1,000 per unit licensing fee for the software $250 per unit production/packaging/miscellaneous costs $20,000 per month office/warehouse lease $10,000 per month promotional marketing materials In addition, you currently have three salespeople who work for you selling and installing software packages. The associated selling expenses are as follows: o $3,000 per month salary for each salesperson $2,500 per month expense budget for each salesperson (travel, entertainment, etc.) $1,000 per unit training and installation service expenses o 5% commission rate based on sales