Maxwell Bogue is the President and Co-Founder of 3Doodler the worlds first 3D pen is reviewing the Profit and Loss Statement for the Fiscal Year 2021-22.

He is pleased to note that 3Doodler has struck a deal to get the 3Doodler on Target shelves during the 2022 holiday season.

The news is great all around, the marketing initiatives undertaken by the company are rapidly increasing operational costs that their revenues will likely not be able to sustain for a very long time unless the companys revenues and profitability is significantly increased.

The Profit and Loss Statement for the fiscal year 2021-22 is presented below for your reference:

3Doodler Financials
Salaries and Other Overheads	$2,500,000
Rent, and Related Costs	$1,750,000
Raw Material Costs	$9,000,000
Machinery Costs	$4,500,000
Shipping Costs (Per Unit)	$8.50
Website Development Costs	$1,500,000
Employee and Sales Team Bonuses (Percentage)	9%
Tradeshow Attendance	$1,300,000
Online Advertising Costs	$3,500,000
Packaging Costs	$2,750,000
Total Sales Revenues	$52,500,000
Gross Profit	$43,500,000
Number of Units Solds	300,000
Customer Information
Average Customer Churn Rate	0.30
Average Contribution per Customer	$145.00
Free Plastic Refills	$25

1. Calculate the total variable costs incurred by 3Doodler in 2021-22. Clearly identify all variable costs used by you to calculate the total variable costs.

2.Calculate the total fixed costs incurred by 3Doodler in 2021-22. Clearly identify all the fixed costs used by you to calculate the total fixed costs.

3. Calculate the unit contribution in US Dollars for each 3D Pen sold by 3Doodler in 2021-22.

4. Calculate the breakeven number of 3D Pens that 3Doodler would have sold in 2021-22.

5. Calculate 3Doodlers profit impact in US Dollars in 2021-22. (3 Points)

6. If 3Doodler offered all new customers free plastic for the 3D printing pen worth $50, calculate the Customer Lifetime Value of the typical 3Doodler customer.

7. Smith at Acme Production, Inc. is trying to determine the true economic value (TEV) for a new computerized machine. This machine costs $20 per hour to operate and can be used for a year before it needs to be replaced. A system crash costs $500,000, and the probability that the machine will crash is 5%. The next-best alternative has a price of $150,000. It can also be used for a year and costs $15 per hour to operate. The cost of a system crash for this alternative is also $500,000, and the probability that it will crash is 15%. Acme plans to operate this machine 8 hours per day, 365 days, over the next year. Calculate the TEV for the new computerized machine from Acme Production, Inc.