Fred Flintstone has just become the product manager for Yabba Dabba Doo, a consumer packaged product with a retail price of $2.00. Retail margins on the product are 33%, while wholesalers take a 12% margin. Yabba and its direct competitors sell a total of 40 million units annually, and Yabba has 24% market share of this total. Variable manufacturing costs for Yabba are $0.09 per unit. Fixed manufacturing costs are $1,800,000. The advertising budget for Yabba is $1,000,000. The product manager’s salary and expenses total $70,000. Salespeople are paid entirely by a 10% commission. Shipping costs, breakage, insurance, and other miscellaneous costs are $0.04 per unit.
What is the unit contribution for Yabba Dabba Doo?
What is Yabba Dabba Doo’s breakeven point?
What market share does Yabba Dabba Doo need to break even?
What is Yabba Dabba Doo’s profit?