Question
1. Executives of the Gateway Computer Company, Inc. have produced a new MBA personal computer for the rapidly expanding business student market. The following cost
1. Executives of the Gateway Computer Company, Inc. have produced a new MBA personal computer for the rapidly expanding business student market. The following cost information pertains to the new computer:
Intel Processor and mother board .......................... $75
Monitor ................................................................. $175
Assembly & testing (direct labor) ......................... $150
Advertising and promotion ............................ $550,000
New machines and factory overhead ............ $400,000
Selling Price ......................................................... $900
Calculate the following: a. Contribution dollars per personal computer b. Break-even volume in units c. Break-even volume in dollars d. Net profit if 7,500 computers are sold e. Necessary computer unit volume to achieve $1,000,000 profit
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