1. a.) Contribution per CD unit:
Unit Selling ? Variable Costs
$9.00 ? 1.25 - .35 ? 1.00 = $6.40
$6.40
b.) Break-even volume in CD units and dollars:
($275,000 + 250,000) / 6.40 = 82,032 units
82,032 * $9.00 = $738,288 to break even
c.) Net profit if 1 million CD's sold:
1,000,000 * 6.40 = 6,400,000
6,400,000 ? 525,000 = $5,875,000
d.) Necessary CD unit volume to achieve $200,000 profit
6.40 (x) - $525,000 = 200,000
x = 113,282 units needed
2. a.) Unit contribution and contribution margin:
$20 ? 4.00 - .50 - .50 = $15 unit contribution
&nbs ...