1. The marketing department at High-tech Inc. is getting ready to launch a new product. Before doing so, they must finalize the business case to present to the executives.The selling price is expected to be $60.The cost information for the new product is as follows:

Overhead expenses$450,000

Advertising$275,000

Raw materials$11/unit

Patent royalties$2.50/unit

Sales commission$3/unit

Salesperson salaries$400,000

1. What is the contribution margin per unit? Provide both the $ and % margin.
2. What volume must be sold for High-tech Inc. to break even (both in units and dollar)?
3. What is the volume in units that must be sold for the firm to make $300,000 in profit?
4. What happens to the break-even volume if managers decide to reduce the price by 20%?
5. What happens to the break-even volume if extra salespeople need to be hired (with a cost of $60,000)?