In order to get the break even point i need to get the total fixed costs and divided by the contribution margin per unit. My question is if i will need to add the fixed manufacturing costs for FY 2018.
Retail price : $659
Retail margin : 42.5%
Wholesale margin : 27.5%
R & D on hearing aid, FY's 2016, 2017 : $229,000
Introductory promotional outlays, FY2019: $219,000
Rosenberg's fixed manufacturing costs : $250,000 per year (FY 2018)
Variable manufacturing costs/unit : $109
Retailer's salesperson's commission : 2% of retailer's selling price
Rosenberg's sales commission : 5% of manufacturer's selling price
Population of Big Smoke" : 2,350,000
Proportion of population over 60 years : 22.5%
a) How many units must Rosenberg sell in the first year to break even? Carefully explain, including any assumptions that you make.