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Best Buy is considering carrying the latest tablet, the FabTab, offered by CoolTech. Along with advertising costs, Best Buy will incur variable overhead to train
Best Buy is considering carrying the latest tablet, the FabTab, offered by CoolTech. Along with advertising costs, Best Buy will incur variable overhead to train personnel on the tablet and fixed overhead for store displays. The following information pertains to Best Buys revenue and costs for carrying the new tablet.
BB's FabTab Cost | $185 |
Shrinkage/damage | 8% of SP |
Customer service OH | 7% of SP |
Additional US Store OH | $750,000 |
National advertising/promotion | $2,500,000 |
Retail selling price | $425 |
1. Contribution per tablet cost
2. Break-even volume in tablet units and in dollars
3. Net profit if 25,000 tablets are sold
4. Necessary tablet unit volume to achieve a $5,000,000 profit.
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