Product X is currently selling at a retail price of $10.99. Retail margins on the product are 40%, while wholesalers take a 15% margin. Product X and its competitors sell at total of 200 million unites annually. Product X has 35% of this market.
Variable manufacturing costs for Product X are $3.10 per unit. Fixed manufacturing costs are $700,000.
The advertising budget for Product X is $4,500,000. Product manager's salary and expenses total $85,000. Sales are paid entirely by a 9.5% commission. Shipping costs, breakage, insurance, and so forth are $0.38 per unit.
What is the unit contribution for Product X?
What is Product X's breakeven point in units and in dollars?
What market share does Product X need to breakeven?
What is Product X's operating / contribution profit?