Question
N.W. Wagner has just become a product manager for the manufacturer of Brand Y. Brand Y is a consumer product with a retail price of
N.W. Wagner has just become a product manager for the manufacturer of Brand Y. Brand Y is a consumer product with a retail price of $1.00. Retail margins on the product are 30%. The manufacturer sells Brand Y directly to the retailers. Variable manufacturing costs for Brand K are $0.10 per unit. Fixed manufacturing costs = $800,000.The manufacturers advertising budget for Brand K is $500,000. The Brand K product managers salary expenses total $35,000. Brand Y manufacturer's salespeople are paid entirely by commission, which is10%. The manufacturers shipping costs, breakage, insurance, and so forth are $0.05 per unit. Note that all questions pertaining to the manufacturer of Brand Y.
In 2019, Brand Y and its direct competitors sold a total of 20 million units annually; Brand Y has 25% of this market. In 2019, what is:
1. The Unit (contribution margin per unit) for Brand Y?
2. Brand Ys break-even point?
3. The market share Brand Y needs to break even?
4. Brand Y's operating income
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