Baseline Assumptions

Sales Price = $20 / unit

Base Sales of 2,000 units @ $20 / unit= $40,000

Fixed costs are $20,000, $10.00 / unit

Variable costs = $16,000 , $8.00 / unit

What is Contribution Margin for Healthy Spring Water?

( in both dollars and as a percentage)

2)What is Break-even in units for Healthy Spring Water?

3)I want to spend $40,000 on advertising. How many more units do I need to sell to break - even on this advertising expenditure?