You are the product manager for Vita-Joy, a consumer product with a retail price of $1.00. Retail margins on the product are 33%, while wholesalers take a 12% margin. Using the indicated supply chain, fill in the yellow boxes with dollar amounts. (Hint: Variable costs at one link of the chain become the price at a previous link in the chain. Begin your Vita-Joy calculations with the customer and move backwards; do not start with the company and move forward).

Variable manufacturing costs for Vita-Joy are $0.09 per unit. Fixed manufacturing costs are $900,000. The advertising budget for Vita-Joy is $500,000. Your salary and expenses total $35,000. Salespeople are paid entirely by a 10% commission. Shipping costs, breakage, insurance, and so forth are $0.02 per unit.

Now answer the following:

1. By filling in theyellow and greenboxes,determine the contribution per unit for Vita-Joy.
2. What is Vita-Joy's breakeven point?

Some Hints:

1. The variable cost for the retailer is the wholesaler's price to the retailer.
2. The wholesaler margin of 33% is applied to the wholesaler price. The wholesaler variable cost can then be calculated.
3. Similarly the variable cost for the wholesaler is the Vita-joy price to the wholesaler.
4. Vita-Joy Commissions are 10% of the Price to the wholesaler.