Instructions: Please read each of the following problems carefully and answer them to the best of your ability. Make sure that you clearly show all of the work that went in to solving the problem. Partial credit will be awarded on each question, so make sure that you attempt all of the problems. Problem 1. You are interested in starting a new company selling SC State Bulldog bowties (let's call them Bull Ties). SCSU will receive a licensing fee for the use of its symbols by your company and a royalty fee on the retail price for each product sold carrying official SCSU images. In order to judge the viability of this new enterprise, you need to develop a financial analysis. You are basing your analysis on the following facts: retail selling price = S40 retailer's margin = 20% factory labor = $12/unit raw materials = $5/unit office lease and equipment = $15,000 SCSU royalty fee paid per unit sold = 3% of retail selling price Sales force salaries = $60,000 Website development and hosting = $32,000 support staff salaries = $30,000 advertising =S50,000 Liscensing fee paid to SCSU= $10,000 Yearly national market for bowties in dollar value = $12,000,000 Questions: 1. What is the variable cost per unit for your bowties? 2. What is the per unit contribution per unit for BullTies? 3. What is the Break Even volume for BullTies? 4. What market share do you need to break even? 5. What is the projected net contribution (profit) for your enterprise assuming 12,500 units sold? Write the answers to the questions on the back of this sheet. Please show all of your work. 1