Horatio Alger just become product manager for Brand X. Brand X is a consumer product with a retail price of $1.00. Retail margins on the product are 33%, while wholesalers take a 12% margin. Brand X and its direct competitors sell a total of 20 million units annually; Brand X has 24% of this market. Variable manufacturing costs for Brand X are $0.09 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. Salespeople are paid entirely by a 10% commission. Shipping costs, breakage, insurance, and so forth are $0.02 per unit.

1) What is the unit contribution for Brand X? 2) What is Brand X's break-even point? 3) What market share does Brand X need to break even? 4) What is Brand X's profit impact?

5) Industry demand is expected to increase to 23 million units next year. Al is considering raising his advertising budget to $1 million. a) If the ad budget is raised, How many units will brand X have to sell to break even?