Question
Cost structure and product price of Chico garden tool company Investment (spent) $100,000 Other fixed overhead $10,000 R&D (spent) $120,000 Labor $3 per garden tool
Cost structure and product price of Chico garden tool company
Investment (spent) | $100,000 | Other fixed overhead | $10,000 |
R&D (spent) | $120,000 | Labor | $3 per garden tool (unit) |
Traditional media advertising | $40,000 | Materials | $2 per garden tool (unit) |
Social media marketing | $30,000 | Discount coupon | $1 per garden tool (unit) |
Factory facility rental | $20,000 | Selling price | $10 per garden tool (unit) |
1.1) What is Unit contribution ($ per unit) of Chico garden tool companys garden tool?
1.2) Break-even volume of its garden tool?
1.3) Dollar break-even of its garden tool?
1.4) How many garden tools to sell to achieve a profit target of $50,000?
1.5) When discount coupon cost is increased to $2 per garden tool (unit), new break-even volume of garden tool with this $2 coupon (when other items stay unchanged)?
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