1. A firm is able to sell 10,000 units at $ 12 per piece. The company fixed cost is $30,000. Variable cost is $6 per unit.
a. What is the contribution per unit?
b. What is the breakeven sales in $? What is the breakeven sale in units?
c. What is the markup on sales price? What is the mark up on total cost?
They raise the price to $15 and demand drops to 8000.
d. Calculate the price elasticity.
e. What is the new markup (profit margin %) on the sales price ($15)? What is the new mark up ( profitmargin %) on total cost?
f. Please calculate the total profit for this company as well as the profit per each toy sold. Are they better off raising the price?