Problem 1: What is the unit contribution for Brand X?
Problem 2: What is Brand X's break-even point?
Problem 3: What market share does Brand X need to break even?
Problem 4: What is Brand X's profit impact?
Problem 5: Industry demand is expected to increase to 23 million units next year. Mr. Alger is considering raising his advertising budget to $1 million.
a. If the advertising budget is raised, how many units will Brand X have to sell to break even?
b. How many units will Brand X have to sell in order for it to achieve the same profit impact that it did this year?
c. What will Brand X's market share have to be next year for its profit impact to be the same as this year?
d. What will Brand X's market share have to be for it to have a $1 million profit impact?