divides its customers into two groups: new customers and upgrade customers (those who previously purchased Data 1-2-3, 4.0 or earlier versions). Although the same physical product is provided to each customer group, sizable differences exist in selling prices and variable marketing costs: Selling price Variable costs Manufacturing Marketing Contribution margin New Customers Upgrade Customers $275 $100 $35 65 100 $175 $35 15 50 $ 50 The fixed costs of Data 1-2-3, 5.0 are $15,000,000. The planned sales mix in units is 60% new customers and 40% upgrade customers. Questions: 1. Calculate the Data 1-2-3, 5.0 breakeven point in units (number of bundles, new customers, upgrade
divides its customers into two groups: new customers and upgrade customers (those who previously purchased Data 1-2-3, 4.0 or earlier versions). Although the same physical product is provided to each customer group, sizable differences exist in selling prices and variable marketing costs: Selling price Variable costs Manufacturing Marketing Contribution margin New Customers Upgrade Customers $275 $100 $35 65 100 $175 $35 15 50 $ 50 The fixed costs of Data 1-2-3, 5.0 are $15,000,000. The planned sales mix in units is 60% new customers and 40% upgrade customers. Questions: 1. Calculate the Data 1-2-3, 5.0 breakeven point in units (number of bundles, new customers, upgrade
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:(Q.7) Data 1-2-3 is a top-selling electronic spreadsheet product Data is about to release version 5.0. 11
divides its customers into two groups: new customers and upgrade customers (those who previously
purchased Data 1-2-3, 4.0 or earlier versions). Although the same physical product is provided to each
customer group, sizable differences exist in selling prices and variable marketing costs:
New Customers
$275
Selling price
Variable costs
Manufacturing
Marketing
Contribution margin
$35
65
100
$175
Upgrade Customers
$100
$35
15
50
$ 50
The fixed costs of Data 1-2-3, 5.0 are $15,000,000. The planned sales mix in units is 60% new
customers and 40% upgrade customers.
Questions:
1. Calculate the Data 1-2-3, 5.0 breakeven point in units (number of bundles, new customers, upgrade
customers) assuming that the planned 60% 40% sales mix is attained?
2. If the sales mix is altained, what is the operating income when 220,000 total units are sold?
9
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