What was the variable cost per unit

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Reference no: EM133500701

Case: Three university friends decided to operate a small on-line business producing and selling healthy baked goods. They were able to secure their domain name "www.floralbakes" for a charge of $300.00. They decided that they will each earn a $25,000 annual income until the business break-even. Advertising and promotion costs were estimated at $4,000 for the year. They decided that the selling price for their baked goods averaged $12.00, and their best estimate of required sales to break even was 8,000 units.

Question 1: What was the variable cost per unit?

Question 2: Name three variable costs that they will definitely incur.

Question 3: What was the contribution margin per unit? What was the total contribution margin?

Question 4: What was the margin as a percentage of the sales?

Question 5: What was the margin as a percentage of the cost?

Reference no: EM133500701

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