The following data refer to a single product, the TECHWHIZ, made by the Markdata Computer Company:Sales price = $5,595Direct materials cost (including purchased components) = $899Direct labor cost = $233Facilities costs (for a highly automated plant; mainly includes rent, insurance,taxes, and depreciation) = $2,352,000 per yearRequired1. What is the contribution margin per unit?2. What is the breakeven point, in units and in dollars?3. What is the required level of sales (in units) if the company plans to increase facilities costs by 5% (toimprove product quality and appearance) and has a desired before-tax profit (πB) of $200,000?4. If the company’s income tax rate is 22%, what unit sales are necessary to achieve an after-tax profit (πA)of $150,000?

The following data refer to a single product, the TECHWHIZ, made by the Markdata Computer Company:Sales price = $5,595Direct materials cost (including purchased components) = $899Direct labor cost = $233Facilities costs (for a highly automated plant; mainly includes rent, insurance,taxes, and depreciation) = $2,352,000 per yearRequired1. What is the contribution margin per unit?2. What is the breakeven point, in units and in dollars?3. What is the required level of sales (in units) if the company plans to increase facilities costs by 5% (toimprove product quality and appearance) and has a desired before-tax profit (πB) of $200,000?4. If the company’s income tax rate is 22%, what unit sales are necessary to achieve an after-tax profit (πA)of $150,000?

Marketing

20th Edition

ISBN:9780357033791

Author:Pride, William M

Publisher:Pride, William M

Chapter19: Pricing Concepts

Section: Chapter Questions

Problem 6DRQ

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