Advanced Electronics manufactures DVDs and sells them directly to retailers who typically sell them for $20. Retailers take a 40% margin based on the retail selling price. Advanced’s cost information is as follows:

DVD package and disc $2.50/DVD Royalties $2.25/DVD Advertising and promotion $500,000 Overhead $200,000 Calculate the following:

a. contribution per unit and contribution margin

b. break-even volume in DVD units and dollars

c. volume in DVD units and dollar sales necessary if Advanced’s profit goal is 20%
profit on sales

d. net profit if 5 million DVDs are sold