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A marketing student has decided to start manufacturing and selling a new board game. Her costs are as follows: Game playing pieces (per game) $1.20
A marketing student has decided to start manufacturing and selling a new board game. Her costs are as follows: Game playing pieces (per game) $1.20 Game board $3.25 Instruction booklet $1.30 Packaging $4.50 She has hired students to assemble/package the games and pays them $0.75 for each game they assemble. Other costs associated with the production/selling of the game include: $10,000 advertising, $8,000 trade show attendance, purchase of a small van $7,500 (good for three years), office space rental $300 per month, telephone costs $100 per month. Her suggested retail price for the game is $30. Retailers will want a 50% margin (on selling price), while wholesalers will want a 20% margin (on selling price). What is the unit contribution (gross margin per unit)? . What is the break-even volume of sales? What volume of sales will be required to earn $20,000 per year profit? D. She is considering cutting out wholesalers and distributing the product herself to retailers. She estimates this will require monthly delivery expenses of $300 and an additional $10,000 of advertising directed towards the retailers. Should she continue using wholesalers or cut them out
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