1. CellNet is in the process of releasing their new cell phone for 2021. Fixed and variable costs are as follows:

• Raw materials..................$1,120,150,000
• New Equipment to Produce Phones.........................................$25,000,000
• Advertising and promotion .......................................................$2,000,000
• Research and Development (2020)$5,000,000
• Screen (per unit) .................................................................................$150
• Material & Labor per phone..........................$75
• Electronics per phone.. ...................................................$155

Market research estimates that the market for the new cell phone IR is 10,000,000 units at a retail price of $1000. CellNet sell their phones through wireless companies and retailers. The traditional retail margin is 3%. Also, there is a wholesale margin of 3.5%. Management would hope for a profit goal of $50,000,000

Calculate:

1. Cost per unit
2. Total cost
3. Revenue per unit
4. Total revenue
5. Profit
6. Contribution margin per unit. Interpret this result.
7. Contribution margin percentage. Interpret this result.
8. Break-even point (units and dollars). Interpret these results

Break-even in units needed to achieve profit goal. Interpret this result