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Crane Video Games Inc. is developing a new video game. It is the most sophisticated game on the market. It sells the video game for
Crane Video Games Inc. is developing a new video game. It is the most sophisticated game on the market. It sells the video game for $245 per copy. Variable costs to produce and sell the video game amount to $65 per copy. Fixed costs amount to $381,600. The company anticipates selling 380 copies of the game per month. The company's policy is to stop producing the video game as soon as a competitor comes out with a more sophisticated version. (a) Your answer is correct. Calculate the amount of operating income the company will earn if it takes 10 months for a competitor to produce a more sophisticated version of the video game. Operating Income $ 302,400 e Textbook and Media Attempts: 1 of 3 used (b) Your answer is correct. Calculate how many units of the video game the company will have to sell in order to break even. Units to break even 2120 units e Textbook and Media Attempts: 1 of 3 used (c) If the company wishes to earn $26,520 over the product's life, calculate the selling price of the video game if a competitor introduces a more sophisticated version of the video game in 6 months. Assume that unit sales are 380 copies per month. (Round answer to 2 decimal places, e.g. 15.25.) Selling price $ per unit Wildhorse manufactures lawn mowers, weed trimmers, and chainsaws. Wildhorse has fixed costs of $3,220,000. Its sales mix and contribution margin per unit are as follows: Sales Mix Contribution Margin per Unit Lawn mowers 30% $28 Weed trimmers 60% 18 Chainsaws 10% 38 Calculate the number of units of each product that Wildhorse must sell in order to break even under this product mix. (Round weighted- average contribution margin per unit to 2 decimal places, e.g. 1.25 and final answers to O decimal places, e.g. 125.) Lawn mowers: units Weed trimmers: units Chainsaws: units
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