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CD package and disc (direct material and labor) = 0.29 Songwriters' royalties = 0.05 Recording artists' royalties = 1.15 Advertising and promotion =199000 Studio Recordings,
- CD package and disc (direct material and labor) = 0.29
- Songwriters' royalties = 0.05
- Recording artists' royalties = 1.15
- Advertising and promotion =199000
- Studio Recordings, Inc., overhead = $275,000
- Selling price to CD distributor = 1.99
To find Contribution per CD unitI did this 1)TVC=Direct materials and labor+songwriters' royalties+artists' royaltiesTVC=0.29+0.05+1.15=1.49
2)CMU=SPU-TVCSPU=1.99TVC per unit=1.49CMU=1.99-1.49= 0.5(Contributionper CD unit is 50 cents)
Would that be correct?
To find Net profit if 1 million CDs are sold I did this PFT=Total revenue-Total Cost 1)TR=1mil x1.99=19900002) TC=TFC+TVCTFC=474000 TVC=1mil x TVC per unit (1.49)=1490000 TC=474000+1490000=1964000 3) PFT=1990000-1964000=26000
are my answers and steps correct?
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