The suggested retail price for each 6-ounce individual container will be $0.60. Because the retailer requires a 30 percent markup, Happy Days’ price to the supermarkets will be $0.42 per six-ounce container. The unit variable costs for the product including packaging will be $0.15. The company estimates its advertising and promotion expenses for the first year will be $1,500,000.
- What is the contribution per unit for the new children’s yogurt product?
- What is the break-even unit volume for the first year that will cover the planned advertising and promotion? The break-even in dollars?
- How many units of the yogurt must Happy Days sell to earn a profit of $800,000?
Please show all the calculations.
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