ZOOworld just released its first game, Tigerland. The total production costs were $10 million. all fixed costs. you will be repsonsible for the marketing and accounting for the sales of the game. Your group is very confident in your ability to market the game, so you have decided to take a percentage of the game revenues as your pay rather than receiving a fixed amount. The amount you negotiated was 4% of the sales revenue.

1. Calculate the breakeven point for ZOOworld Video games.

2. Assume in its first year of release, the sales for the game total $16 million. Using a contribution margin income statement calculate the net income for ZOOworld Video Games the first year for this game.