Question
1. Executives of Studio Recordings, Inc., produced the latest compact disk, the Starshine Sisters Band, titled Starshine/Moonshine. The following cost information pertains to the new
1. Executives of Studio Recordings, Inc., produced the latest compact disk, the Starshine Sisters Band, titled Starshine/Moonshine. 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 Recordings, Inc., overhead $215,000 Selling price to CD distributor $9.00 Calculate the following: a. Contribution per CD unit b. Break-even volume in CD units and dollars c. Net profit if 1 million CDs are sold d. Necessary CD unit volume to achieve a $200,00 profit
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