The Excellent DVD Company Sells DVDs for $62 Each

Essay

The Excellent DVD Company sells DVDs for $62 each. Manufacturing cost is $22.70 per DVD; marketing costs are $7.75 per DVD; and royalty payments are 15% of the selling price. The fixed cost of preparing the DVDs is $227 300. Capacity is 20 000 DVDs.
a)Draw a detailed break-even chart.
b)Compute the break-even point
(i)in units;
(ii)in dollars;
(iii)as a percent of capacity.
c)Determine the break-even point in units if fixed costs are increased by $3300 while manufacturing cost is reduced $1.65 per DVD.
d)Determine the break-even point in units if the selling price is increased by 10% while fixed costs are increased by $2900.