1) Executives of Studio Recordings, Inc. produced the latest compact disc by the Starshine Sisters Band. The following cost information pertains to the new CD:

CD package and disc (direct material and labor) $1.25/CD

Songwriters royalties $0.35/CD

Recording artists royalties $1.00/CD

Advertising and promotion $275,000

Studio rent $250,000

Selling price to CD distributor $9.00

Calculate the following:

1. contribution per unit
2. break-even volume in CD units and dollars
3. net profit if 1 million CDs were sold
4. necessary CD unit volume to achieve a $200,000 profit
5. the percentage share of the market that the CD has to achieve to earn $200,000 profit, assuming the total market for the CD is 250,000 units.