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executives of Studio Recordings Inc. produced the latest compact disc by the Starshine Sisters Band, titledSunshine/Moonshine. The following cost informationpertains to the CD.a. CD package $1.25/CDb. Songwriters’ royalties $0.35/CDc. Recording artists’ royalties $1.00/CDd. Advertising and promotion $275,000e. Studio Recording Inc.’s overhead $250,000f. Selling price to the CD distributor $9.00Calculate the following:1. Contribution per CD unit2. Break-even volume in CD units and dollars3. Net profit if 1 million CDs are sold4. Necessary CD unit volume to achieve a $200,000profit

executives of Studio Recordings Inc. produced the latest compact disc by the Starshine Sisters Band, titledSunshine/Moonshine. The following cost informationpertains to the CD.a. CD package $1.25/CDb. Songwriters’ royalties $0.35/CDc. Recording artists’ royalties $1.00/CDd. Advertising and promotion $275,000e. Studio Recording Inc.’s overhead $250,000f. Selling price to the CD distributor $9.00Calculate the following:1. Contribution per CD unit2. Break-even volume in CD units and dollars3. Net profit if 1 million CDs are sold4. Necessary CD unit volume to achieve a $200,000profit

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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 CD.
a. CD package $1.25/CD
b. Songwriters’ royalties $0.35/CD
c. Recording artists’ royalties $1.00/CD
d. Advertising and promotion $275,000
e. Studio Recording Inc.’s overhead $250,000
f. Selling price to the CD distributor $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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