Question

Global Fusion, a key customer of Upsilon, has forest that it would purchase 100,000 units of product from Upsilon next year. Upsilon budgeted $1,000,000.00 in fixed overhead expense to service the Global Fusion account. The Global Account was expected to yield these results: Unit sales 100,000- average project sales price $75- sales revenue 7,500,000-unit costs of goods sole 55-fixed expense 1,000,000-variable expense 10% agent commission

1. Global fusion recently notified upsilon that circumstances demand that they receive 5% discount of the 75$ market price. Given Upsilons expected relationship with Global, how much contribution to overhead was Global expected to yield to Upsilon in the coming year revenues above all the direct cost of sales and expenses at a selling price of $75?

Answer 1