Assume the following about Magnetic Poetry's cost structure: The wholesale price for one Original Magnetic Poetry Kit is

$9.50. The retail price is $20. It costs the company as follows:

$2.50 to manufacture one Original Magnetic Poetry Kit, $0.50 to package it, $0.50 for shipping and handling, and $ 1.00 of variable costs.

a. Calculate the contribution margin.

b. Assume that Magnetic Poetry has monthly fixed costs of $20,000. How many kits would the company need to sell in order to break even?

c. Calculate the markup percentage for the following:
• Manufacturer -+ Retailer • Retailer -+ Consumer