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The Superior Jump drive Company sells jump drives for $10 each Manufacturing cost is $260 per jump drive marketing costs are $240 per jump drive

The Superior Jump drive Company sells jump drives for $10 each. Manufacturing cost is $2.60 per jump drive; marketing costs are $2.40 per jump drive; and royalty payments are 20% of the selling price. The fixed cost of preparing the jump drive is $18 000. Capacity is 15 000 jump drives. (a) Compute (i) The contribution margin; (ii) The contribution rate. (b) Compute the break-even point (i) In units; (ii) In dollars; (iii) As a percent of capacity. (c) Draw a detailed break-even chart. (d) Determine the break-even point in units if fixed costs are increased by $1600, while manufacturing cost is reduced by $0.50 per jump drive. (e) Determine the break-even point in units if the selling price is increased by 10%, while fixed costs are increased by $2900.

Apr 09 2020 View more View Less

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