Product X is a consumer product sold by its manufacturer at price $5.99 per unit. The total annual sales of product X are $31,248,632. The fixed costs involved in manufacturing product X are $1,500,000 and the variable costs are $0.86 per unit. The advertising budget is $1,800,000. Miscellaneous variable costs (i.e. shipping and handling) are $0.04 per unit. Salespeople are paid entirely by a 12% commission based on manufacturer's price. Product manager's salary and expenses are $90,000.

Calculate the following:

1. What is the unit (contribution) margin for Product X (in $)?

2. What is product X's break-even volume?

3. What is Product X's (annual) net profit?

4. If manufacturer doubles its advertising expenditures, estimate the increase in sales over current volume needed to maintain the current profit level.

5. Calculate the increase in sales over the current volume needed to maintain current profit level if the manufacturer lowers price by 25%.

When solving problems round manufacturer's price, sales and net income (profits) to the second decimal point (e.g. $5.69 and $23,123,245.32). Also, round sales volumes to the whole numbers (e.g., 123,456 units).