Distributor unit contribution-percentage contribution margin

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An independent film distributor is getting ready to release a documentary video entitled, The Unedited Truth. The distributor will sell the video through specialty retailers. The distributor estimates the total market for the documentary video to be 100,000 units. Other data are as follows: Label & Titles Design Fee (one time charge) $18,000 Advertising 42,000 Reproduction costs (per 1000 copies) 4,000 Packaging costs (per 1000 copies) 500 Production royalties (per 1000 copies) 5000 The distributor’s suggested retail price (MSRP) for the video is $30 per unit. The retailer’s required margin is 40 percent. a. What is the distributor’s unit contribution and percentage contribution margin? [Hint: To solve this problem, you must first calculate the distributor’s unit selling price to the retailer. Work backwards from the MSRP. See the primer for explanation.] b. What is the distributor’s breakeven point in units? In dollars?

Reference no: EM131426786

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