The Superior Jumpdrive Company sells jump drives for $10 each. Manufacturing cost is $2.60 per…
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) 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.
d) Determine the break-even point in units if the selling price is increased by 10%, while fixed costs are increased by $2900.
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) 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.
d) 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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