1.Suppose the fixed costs for producing a musical CD are $1,750,000 while variable costs are calculated at $2.75 per CD. At a selling price of $7.75 to retailers, the sales forecast is 1,000,000 units. What is the break-even units?

		200,000 units
		250,000 units
		300,000 units
		350,000 units

2.A marketing manager is trying to decide whether to use television advertising or direct mail to promote a new brand of spray paint. She has a limited amount of money available for promotion, so she is interested in getting the maximum return on promotion expenditures. For a single 30-second commercial run on a national prime-time network TV program: Number of Households Reached = 8,000,000 Cost of Commercial = $500,000 What is the CPM (cost per thousand)?

		$16.00
		$32.50
		$62.50
		$80.00

3.Continued from the above question, she is also considering sending a direct mail solicitation to a group of consumers and spend only $37,500, which is less than 10% of the TV advertising spending. If the target CPM is the same as the one you answered above, how many households will be reached by direct mail?

		500,000 housholds
		550,000 households
		600,000 households
		650,000 households