Question
1. The Superior Jumpdrive Company sells jump drives for $10 each. Manufacturing cost is $2.60 per jump drive; marketing costs are $2.40 per jump drive;
1. The Superior Jumpdrive Company sells jump drives for $10 each. Manufacturing cost is $2.60 per jump drive; marketing costs are $2.40 per jump drive; and royalty payments are 20% of the selling price. The fixed cost of preparing the jump drive is $18,000. Capacity is 15,000 jumpdrives. a. Compute i. the contribution margin; ii. the contribution rate. b. Compute the break-even point i. in units; ii. in dollars; iii. as a percent of capacity. c. Draw a detailed break-even chart. d. Determine the break-even point in units if the selling price is increased by 20%, while fixed costs are increased by $3,900. e. Determine the break-even point in units if fixed costs are increased by $1,700, while the manufacturing cost is reduced by $0.60 per jump drive.
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