Question
Like many companies, Walker & Company started with a sole product, The Bevel Trimmer. Below is some of Walker & Companys financial information during that
Like many companies, Walker & Company started with a sole product, The Bevel Trimmer. Below is some of Walker & Companys financial information during that initial time period. Use this information to answer the corresponding questions. Show your calculations/math.
Mortgage: $100,000 Advertising: $400,000 Research and Development:$200,000 Cost of materials per trimmer: $30 Salary: $300,000 Cost of packaging per trimmer: $20
a)If the selling price per trimmer was $100, what is the companys contribution margin for the trimmer?
b)If the selling price per trimmer was $100, what is the breakeven point in units (volume)?
c)Based on the given information (including $100 selling price), if the company wanted to earn a profit of $500,000 instead of breaking even, what is the number of units the company must sell?
d) If the company expects a 10% return on a volume of 50000 units, what price would they charge?
e)If the company simply wanted to charge a 10% markup how much would they charge? (Assume 50,000 units).
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