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A B C D E The Cruiser Alternative 1 Alternative 2 Alternative 3 Selling Price per unit 38.00 40.00 S 34.00 Variable costs per unit
A B C D E The Cruiser Alternative 1 Alternative 2 Alternative 3 Selling Price per unit 38.00 40.00 S 34.00 Variable costs per unit 32.00 32.00 S 32.00 Commissions per unit 4.56 4,00 0.00 Contribution Margin per unit 1.44 S 4.00 2.00 Unit sales 12,000.00 14000 16000 Total Contribution Margin S 17,280 56,000 32,000 Advertising costs 0 35,000 O Net Contribution Margin S 17,280 LO- 21,000 $ 32,0009 If alternative 3 is chosen based on net CM and the actual sales do not meet expectations by 20% how much should Crosby increase the selling price to the wholesaler to make $32,000 in CM? 0 Prove your answer by showing all of your work. New sales number New Selling Price Selling Price per unit VC per unit CM per unit S $ Unit sales 8 Total CM S $ 32,000 S 0 Difference in CM S Difference in CM per unit #DIV/O! Increase selling price per unit byRely on wholesalers to sell The Cruiser. Crosby would sell The Cruiser to the wholesaler at $34 per unit. There would be no advertising program. Estimated sales would be 16,000 units under this plan
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