Kickflic DVD Recordings is producing the latest DVD movie for Jackie Chan. The following cost information pertains to the new DVD:
DVD package and disc (direct material and labor) $1.10/DVD
Jackie Chan Production Company royalties $2.50/DVD
Actors’ Royalties $0.54/DVD
Mechanical Royalties $0.91/DVD
Writers' Royalties $0.21/DVD
Advertising and promotion $350,000
Kickflic DVD Recording's overhead $275,000
Selling price to DVD distributor $8.99
Calculate the following (show all calculations):
a. Contribution and contribution margin per DVD unit
b. Break-even unit and sales volume
c. net profit if 200,000 DVD are sold to distributors.
d. Necessary unit volume and revenue needed to achieve a $200,000 profit.