10. E-tab manufactures a line of tablet computers. The tablets are sold directly to the retailers for $700. E-tabs variable costs per unit are $220 and total fixed costs for the line are $24,516,000.

a. What is the contribution per unit and the contribution margin percentage? What does the term contribution mean in this context?

b. How many tablets must be produced and sold by E-tab in order to breakeven? What is the breakeven point in sales dollars?

c. The marketing director for eTab wants to generate profits equal to 20 percent of sales for the tablet line. How many units must be produced and sold in order to achieve this target return? What sales revenue must be generated?

d. A retail chain, which purchases the tablet computers directly from E-tab, uses a 40 percent markup on its (the retailers) cost in order to price this item. What will the retail price of this item be?