Question: I need help on requirement 2 & 3. New Customers Upgrade Customers Selling price $ 275 $ 100 Variable costs Manufacturing $ 35 $ 35
I need help on requirement 2 & 3.




New Customers Upgrade Customers Selling price $ 275 $ 100 Variable costs Manufacturing $ 35 $ 35 65 100 15 50 Marketing $ 175 $ 50 Contribution margin Zapo 1-2-3 is a top-selling electronic spreadsheet product. Zapo is about to release version 5.0. It divides its customers into two groups: new customers and upgrade customers (those who previously purchased Zapo 1-2-3, 4.0 or earlier versions). Although the same physical product is provided to each customer group, sizable differences exist in selling prices and variable marketing costs: (Click the icon to view the price and cost information.) The fixed costs of Zapo 1-2-3 5.0 are $15,000,000. The planned sales mix in units is 60% new customers and 40% upgrade customers. Read the requirements. 2. 3. If the sales mix is attained, what is the operating income when 210,000 total units are sold? Show how the breakeven point in units changes with the following customer mixes: a. New 40% and upgrade 60% b. New 80% and upgrade 20% c. Comment on the results. Requirement 1. What is the Zapo 1-2-3 5.0 breakeven point in units, assuming that the planned 60% / 40% sales mix is attained? units are sold to new customers, and 2 units are sold to customer who Begin by determining the sales mix. For every bundle, 3 bought upgrades. Determine the formula used to calculate the breakeven point when there is more than one product sold, then enter the amounts in the formula to calculate the breakeven point in bundles. Fixed costs Contribution margin per bundle = Breakeven point in bundles 15,000,000 $ 625 24,000 The breakeven point is 72,000 units for new customers and 48,000 units for upgrade customers. Requirement 2. If the sales mix is attained, what is the operating income when 210,000 units are sold? New customers Upgrade customers Total Units sold Total revenue Total variable costs Contribution margin Fixed costs Operating income
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
