Breakeven Analysis

Please assume that you are the manufacturer in answering the questions below.

Jennifer Brown has just become product manager for Brand X. Brand X is a consumer product with a retail price of $ 1.00. Retailer's margins on the product are 40%,based on the final sellingprice (40% of the price the retailer charges to consumers). Brand X and its direct competitors sell a total of 20 million units annually; Brand X has 25% of this market.

Variable manufacturing costs for Brand X are $0.15 per unit. Fixed manufacturing costs are $900,000. The Advertising budget for Brand X is $500,000. The Brand X product manager's salary and expenses total $35,000, breakage, insurance, and so forth are $0.04 per unit.

1.What is the price you (manufacturer) charge to the retailer? (1.5 pts)

2.Calculate the total fixed cost and the unit variable cost for brand X. (2.0 pts)

3.What isyour(manufacturer's) unit margin for Brand X? (1.0 pts)

4.What quantity does Brand X sell now? (1.0 pts)

5.What is Brand X's profit now? (1.5 pts)