Question: Netflix has three subscription plans: Basic, Standard, and Premium. The financial data is as follows: Basic: Sales Units - 10,000,000, Sales Price per Unit -

  1. Netflix has three subscription plans: Basic, Standard, and Premium. The financial data is as follows:
    • Basic: Sales Units - 10,000,000, Sales Price per Unit - $8, Variable Cost per Unit - $2, Fixed Cost - $100,000,000
    • Standard: Sales Units - 8,000,000, Sales Price per Unit - $12, Variable Cost per Unit - $3, Fixed Cost - $80,000,000
    • Premium: Sales Units - 5,000,000, Sales Price per Unit - $15, Variable Cost per Unit - $4, Fixed Cost - $70,000,000 Requirements:
    • Prepare the Income Statement for each subscription plan.
    • Calculate the Contribution Margin per unit for each plan.
    • Determine the Break-Even Point in units and dollars for each plan.
    • Assess the profitability and recommend pricing adjustments.

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