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Shawn owns a business refurbishing Navy Surplus calculators. He has a contract to buy the calculators...

Shawn owns a business refurbishing Navy Surplus calculators. He has a contract to buy the calculators from government sources and could purchase up to 4,200 a month. He paid $5.20 per calculator. He invested $42,400 in an automated engraving machine and started selling personalized calculators through a network of stores. On average, his resellers charged 55% margins and were content to sell at his recommended retail prices as long as they received their margins. It costs him $1.32 in labor and materials to engrave customized messages. For several months he sold an average of 1,150 calculators per month at a retail price of $32 per calculator. When Shawn raised the price to $40, the number of calculators sold dropped to 610.

a) What are the variable costs for each calculator he sells?

b) How much total dollar contribution did he make selling calculators at his original price in a month?

c) How much total dollar contribution did he make when the price increased?'

d) Assuming the price-quantity relationship is linear, what is the slope?

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