Salespersons commissions is 10% of manufacturers selling price

Manufacturers selling price is $16.32

Margins: Retailer $30 Jobber $24 Wholesaler $19.20

Variable Cost: $4.63

Fixed Cost: $800,000

Unit Contribution: $11.69

Break even in units: 68,435 units

Break even in dollars: $1,116,859.20

Break even in market share: 6.8%

Total contribution: $2,454,900

Total profit: $1,654,900

2. One of the first decisions you have to make as the brand manager for Flexo is whether or not to add a new line of razors, the "Super Flexo" line. This line would be marketed in addition to the original Flexo line. Your brand assistant has provided you with the following facts: $40 per unit $ 3 per unit $ 2 per unit $ 2 por unit (at a 50,000 unit volume level) a. Retail selling price b. All margins the same as before C. Direct factory labor d. Raw materials e. Additional factory and administrative overheads f. Salespersons' commissions the same percent as before 9. Incremental sales force travel cost h. Advertising for Super Flexo 1. New equipment needed 1. Research and development spent up to now k. Research and development to be spent this year to commercialize the product $ 50,000 $600,000 $500,000 (to be depreciated over 10 years) $200,000 $500,000 (to be amortized over five years) Questions 1. What is the contribution per unit for the Super Flexo brand? 2. What is the break-even volume in units and in dollars? 3. What is the sales volume in units necessary for Super Flexo to yield, in the first year, a 20 percent return on the equipment to be invested in the project? 3. The 540 per unit selling price for Super Flexo seems high to you. You thought you might lower the price to $37 per unit and raise retail margin to 25 percent. Question What is the break-even volume in units? 2. One of the first decisions you have to make as the brand manager for Flexo is whether or not to add a new line of razors, the "Super Flexo" line. This line would be marketed in addition to the original Flexo line. Your brand assistant has provided you with the following facts: $40 per unit $ 3 per unit $ 2 per unit $ 2 por unit (at a 50,000 unit volume level) a. Retail selling price b. All margins the same as before C. Direct factory labor d. Raw materials e. Additional factory and administrative overheads f. Salespersons' commissions the same percent as before 9. Incremental sales force travel cost h. Advertising for Super Flexo 1. New equipment needed 1. Research and development spent up to now k. Research and development to be spent this year to commercialize the product $ 50,000 $600,000 $500,000 (to be depreciated over 10 years) $200,000 $500,000 (to be amortized over five years) Questions 1. What is the contribution per unit for the Super Flexo brand? 2. What is the break-even volume in units and in dollars? 3. What is the sales volume in units necessary for Super Flexo to yield, in the first year, a 20 percent return on the equipment to be invested in the project? 3. The 540 per unit selling price for Super Flexo seems high to you. You thought you might lower the price to $37 per unit and raise retail margin to 25 percent. Question What is the break-even volume in units