Question

ERU Kardand Video Games Inc. is developing a new video game. It is the most sophisticated game on the market. It sells the video game for $210 percop. Vanabe cuts to produce and se the video game amount to $0 per copy. Pred costs amount to $398,400. The company anticipates selling 300 copies of the game per month. The company policy is to stop producing the video game as soon as a competitor comes out with a more sophisticated version Your answer is correct. Calculate the amount of operating income the company will earn it takes 11 months for a competitor to produce a more sophisticated version of the video game Operating Income T 129600 SHOW SOLUTION SHOW ANSWER LINK TO TEXT LINK TO TEXT your answer is correct, Calculate how many units of the video game the company will have to sell in order to break even Units to break even 2400 units SHOW SOLUTION SHOW ANSWER LINK TO TEXT LINK TO TEXT x your answer is incorrect. Try again. If the company wishes to earn $32,400 over the product's life, calculate the selling price of the video game if a competitor introduces a more sophisticated version of the video game in 4 months. Assume that unit sales are 300 copies per month. (Round answer to 2 decimal places, e.g. 15.25.) Selling price 1 429 per unit

Answer 1

required 1 Sales less variable cost Contribution margin Fixed cost Operating income price per unit 210 $ 50 $ units 3300 $ 3300 $ $ $ $ total 693,000 165,000 528,000 398,400 129,600 160 required 2 existing Break even point (in unit) Fixed Cost contribution per unit = $ $ 398,400 160.00 existing Break even point (in unit) $ 2,490 units

required 3 selling price per unit $ 409 Total sales = variable cost+fixed cost + targeted profit Total sales =( 4 x 300 x 50) +398400 +32400 Total sales = $ 490,800 tota units sold in 4 months = 4 x 300 = $ 1,200 seliing orice per unit = $ 409 Please comment if you have any doubt Please give thumps up if you are satisfied with the answer