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The Superior Jumpdrive Company sells jump drives for $10 each. Manufacturing cost is $2.60 per jump drive; marketing costs are $2.40 per jump drive; and
The Superior Jumpdrive Company sells jump drives for $10 each. Manufacturing cost is $2.60 per jump drive; marketing costs are $2.40 per jump drive; and royalty payments are 20% of the selling price. The fixed cost of preparing the jump drive is $18 000. Capacity is 15 000 jump drives. a. Compute i. the contribution margin; ii. the contribution rate. b. Compute the break-even point i. in units; ii. in dollars; iii. as a percent of capacity. c. Draw a detailed break-even chart. d. Determine the break-even point in units if fixed costs are increased by $1600, while manufacturing cost is reduced by $0.50 per jump drive. e. Determine the break-even point in units if the selling price is increased by 10%, while fixed costs are increased by $2900
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