Executives of Studio Recordings Inc. produced the lat- est compact disc by the Starshine Sisters Band, titled Sunshine/Moonshine. The following cost information pertains to the CD. a. CD package b. Songwriters' royalties c. Recording artists' royalties d. Advertising and promotion $1.25/CD $0.35/CD $1.00/CD $275,000 e. Studio Recording Inc.'s overhead f. Selling price to the CD distributor $250,000 $9.00 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

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Executives of Studio Recordings Inc. produced the lat-
est compact disc by the Starshine Sisters Band, titled
Sunshine/Moonshine. The following cost information
pertains to the CD.
a. CD package
b. Songwriters' royalties
c. Recording artists' royalties
d. Advertising and promotion
$1.25/CD
$0.35/CD
$1.00/CD
$275,000
e. Studio Recording Inc.'s overhead
f. Selling price to the CD distributor
$250,000
$9.00
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
Transcribed Image Text:Executives of Studio Recordings Inc. produced the lat- est compact disc by the Starshine Sisters Band, titled Sunshine/Moonshine. The following cost information pertains to the CD. a. CD package b. Songwriters' royalties c. Recording artists' royalties d. Advertising and promotion $1.25/CD $0.35/CD $1.00/CD $275,000 e. Studio Recording Inc.'s overhead f. Selling price to the CD distributor $250,000 $9.00 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
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