1) (5pts] Davis Inc. produces the golf rangefinder. The following cost information pertains to this new devise: Package and golf rangefinder (direct material and labor) $30/Unit Software (program installed) Advertising and promotion Davis Inc.'s overhead Selling price to distributors Calculate the following: a Unit contribution (= gross margin per unit, S/Unit) b. Break-even volume in units and dollars c. Net profit if 10.000 units are sold d. Necessary unit volume to achieve a $200,000 profit $20 Unit $300,000 $250,000 $150 2) [5pts] Vacaville Inc. produces and markets golf bags through a variety of retail outlets. Presently, Vacaville Inc. directly distributes its products to some of the largest sport equipment retailers, not consumers. Vacaville's suggested retail price for the bag is $200 per unit. The retailer's margin is 40 percent. Other data available are as follows: Factory facility rental Other fixed overhead Promotion & Advertising Production of bags (per 1,000 bags) Manufacture of labels and packaging (per 1,000 bags) $50,000 $30,000 $100.000 $50,000 $10,000 a. What unit contribution (S/Unit) will a retailer earn from selling a Vacaville golf bag to a consumer? b. For what price will Vacaville sell a golf bag to a retailer? c. What is Vacaville's unit contribution (S/Unit) and contribution margin ratio (%) of the golf bag? d. What is Vacaville's break-even point in units? In dollars? 3) [5pts] The product manager for golf balls at Napa Corporation was reviewing price and promotion alternatives for two products: Far and Further. Both products were designed to hit and fly high and long, but Far was a regular ball whereas Further included a special component that helps a distance for the players. Both of the brand managers of F and Further are considering two alternatives in order to stimulate sales volume-additional promotion/advertising ($100,000 for each) or a price reduction (10% for each). A volume, price, and cost summary for the two products follow: Price (per box) Unit variable costs Unit contribution Overhead & Advertising Unit volume Far $10.00 $5.00 Further $12.00 $8.00 $4.00 $5.00 $100,000 100,000 units $200,000 80,000 units a. What is break-even point in units for Far and Further? In dollars for Far and Further? b. What absolute increase in unit sales and dollar sales will be necessary to recoup the incremental increase in advertising expenditures, which is $100,000, for Far? For Further? c. If the price of each product is reduced by 10 percent, what is break-even point in units for Far and Further In dollars for Far and Further? d. Compare the results of 3)-a and 3)-c, and explain the impact of price reduction. CS Scanned with CamScanner Revised 126-