Executives of Studio Recordings, INC produced the latest compact disc by the Starshine Sisters Band, titled Sunshine/Moonshine Strategic Marketing Chapter 2 Problem 1

Answer: Includes Detailed Steps and Calculation

Strategic Marketing Chapter 2 Problem 1

Executives of Studio Recordings, INC produced the latest compact disc by the Starshine Sisters Band, titled Sunshine/Moonshine. The Following cost information pertains to the new CD:

CD package and disc (direct material and labor) $1.25/CD
Songwriters’ royalties $0.35/CD
Recording artists’ royalties $1.00/CD
Advertising and promotion $275,000
Studio Recordings, Inc.’s overhead $250,000
Selling price to CD distributor $9.00

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Calculate the following:

  1. Contribution per CD unit
  2. Break-even volume in CD units and dollars
  3. Net profit if 1 million CDs are sold
  4. Necessary CD unit volume to achieve a $200,000 profit

Course: MKT 450 Marketing Management
School: Grand Canyon University

  • 06/09/2017
  • 7
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