Question

Product X is currently selling at a retail price of $10.99. Retail margins on the product...

Product X is currently selling at a retail price of $10.99. Retail margins on the product are 40%, while wholesalers take a 15% margin. Product X and its competitors sell at total of 200 million unites annually. Product X has 35% of this market.

Variable manufacturing costs for Product X are $3.10 per unit. Fixed manufacturing costs are $700,000.

The advertising budget for Product X is $4,500,000. Product manager's salary and expenses total $85,000. Sales are paid entirely by a 9.5% commission. Shipping costs, breakage, insurance, and so forth are $0.38 per unit.

What is the unit contribution for Product X?

What is Product X's breakeven point in units and in dollars?

What market share does Product X need to breakeven?

What is Product X's operating / contribution profit?

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

What is the unit contribution for Product X? $29.50 Million

What is Product X's breakeven point in units and in dollars? Breakeven Points in Units is 13 Million Units

Breakeven Points in Dollars is $10.02 selling price per unit

What market share does Product X need to breakeven? 6.27%

What is Product X's operating / contribution profit? $24.22 Million Dollars

All the working can be seen on the attached excel sheet.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
EXERCISE 1 Fred Flintstone has just become the product manager for Yabba Dabba Doo, a consumer...
EXERCISE 1 Fred Flintstone has just become the product manager for Yabba Dabba Doo, a consumer packaged product with a retail price of $2.00. Retail margins on the product are 33%, while wholesalers take a 12% margin. Yabba and its direct competitors sell a total of 40 million units annually, and Yabba has 24% market share of this total. Variable manufacturing costs for Yabba are $0.09 per unit. Fixed manufacturing costs are $1,800,000. The advertising budget for Yabba is $1,000,000....
Vanessa Pareja has just become a product manager for Brand X as a toy manufacturer. Brand...
Vanessa Pareja has just become a product manager for Brand X as a toy manufacturer. Brand X is a product with a retail price of $1.00. Retail Margins on the product are $0.35 while wholesalers take a 12% margin. Brand X and its direct competitors sell a total of 20 million units annually. Brand X has 24% of this market. Variable manufacturing costs for Brand X are $0.09 per unit. Fixed manufacturing costs are $900,000. The advertising budget for Brand...
A product has a contribution margin of $9 per unit and a selling price of $55...
A product has a contribution margin of $9 per unit and a selling price of $55 per unit. Fixed costs are $27,000. Assuming new technology increases the unit contribution margin by 50 percent but increases total fixed costs by $16,200, what is the new breakeven point in units?
X Company estimates the following for its two products in 2019: Product X Product Y Selling...
X Company estimates the following for its two products in 2019: Product X Product Y Selling price $13.60      $34.50      Variable cost $11.30      $26.50      Production [units] 50,000      10,000      Estimated fixed costs in 2019 are $70,000. What is X Company's estimated weighted average contribution margin per unit in 2019?
Freight industries has several divisions. The Eastern Division can produce 3,000 units of product X at...
Freight industries has several divisions. The Eastern Division can produce 3,000 units of product X at the following costs: $75/unit variable costs and $70/unit fixed costs. Eastern sells units of X in the outside market for $180/unit. The Canadian Division can use product X in its manufacturing process. If Canadian spends $80 of variable cost per unit to process X further, it can sell the resulting product Y for $200/unit. Canadian can acquire product X from an outside supplier for...
Freight industries has several divisions. The Eastern Division can produce 3,000 units of product X at...
Freight industries has several divisions. The Eastern Division can produce 3,000 units of product X at the following costs: $75/unit variable costs and $70/unit fixed costs. Eastern sells units of X in the outside market for $180/unit. The Canadian Division can use product X in its manufacturing process. If Canadian spends $80 of variable cost per unit to process X further, it can sell the resulting product Y for $200/unit. Canadian can acquire product X from an outside supplier for...
BM Company sells two products, X and Y. Product X sells for $20 per unit with...
BM Company sells two products, X and Y. Product X sells for $20 per unit with variable costs of $11 per unit. Product Y sells for $30 per unit with variable costs of $16 per unit. During this period, BM sold 16,000 units of X and 4,000 units of Y, making Total Revenue of $440,000, and after subtracting variable cost got Total Contribution Margin of $200,000, and after subtracting Total Fixed Cost of $110,000, earned Operating Profit of $90,000. When...
11)X Company estimates the following for its two products in 2019: Product X Product Y Selling...
11)X Company estimates the following for its two products in 2019: Product X Product Y Selling price $13.80      $33.50      Variable cost $11.60      $25.00      Production [units] 59,000      11,000      Estimated fixed costs in 2019 are $72,000. What is X Company's estimated weighted average contribution margin per unit in 2019? 12) X Company, a merchandiser, had the following income statement for 2018: Sales $194,103 Cost of goods sold   123,250 Gross margin $70,853 Other operating expenses    47,940 Profit $22,913 $103,850 of the cost of...
X Company is considering launching a new product. After conducting a market research study that cost...
X Company is considering launching a new product. After conducting a market research study that cost $5,000, the company estimates sales of 7,900 units in each of the next 4 years, with a contribution margin of $6.10 per unit. Additional fixed costs will be $11,958. Equipment costing $120,000 will have to be purchased; the equipment will have no salvage value at the end of 4 years. What is the internal rate of return of launching the new product?
X Company is considering launching a new product. After conducting a market research study that cost...
X Company is considering launching a new product. After conducting a market research study that cost $4,600, the company estimates sales of 8,500 units in each of the next 4 years, with a contribution margin of $6.00 per unit. Additional fixed costs will be $17,160. Equipment costing $120,000 will have to be purchased; the equipment will have no salvage value at the end of 4 years. What is the internal rate of return of launching the new product?  [Submit your rate...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT