Question 2 Allied Games is developing a new game app. Allied expects to sell the game for $4.50 per download. The Part 2: CVP Analysis cost accountant has provided the following estimates for development, marketing, commissions, and royalty costs. Estimated Cost $ 68,000 Code programming Testing (reviews, field testing, reprogramming) 55,000 Depreciation on technical equipment 11,000 Administrative 13,000 Marketing Sales Team Commissions (3% of selling price) Distribution Commissions (25% of selling price) Game Designer Royalties (12% of selling price) Total Costs at Production of 300,000 Copies 50,000 40,500 337,500 162,000 $737,000 The only variable costs are sales team commissions, distribution commissions, and the game designer royalties. How many downloads must Allied Games sell in order to generate operating earnings of 25% of sales revenue? (Round up your answer to the nearest whole download.)

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ISBN:9781259964947
Author:Libby
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Question 2
Allied Games is developing a new game app. Allied expects to sell the game for $4.50 per
download. The Part 2: CVP Analysis
cost accountant has provided the following estimates for development, marketing,
commissions, and
royalty costs.
Estimated Cost
Code programming
$ 68,000
Testing (reviews, field testing, reprogramming)
55,000
Depreciation on technical equipment
11,000
Administrative
13,000
Marketing
50,000
Sales Team Commissions (3% of selling price)
40,500
Distribution Commissions (25% of selling price)
337,500
Game Designer Royaties (12% of selling price)
162,000
Total Costs at Production of 300,000 Copies
$737,000
The only variable costs are sales team commissions, distribution commissions, and the
game designer
royalties.
How many downloads must Allied Games sell in order to generate operating earnings of
25% of sales
revenue? (Round up your answer to the nearest whole download.)
Transcribed Image Text:Question 2 Allied Games is developing a new game app. Allied expects to sell the game for $4.50 per download. The Part 2: CVP Analysis cost accountant has provided the following estimates for development, marketing, commissions, and royalty costs. Estimated Cost Code programming $ 68,000 Testing (reviews, field testing, reprogramming) 55,000 Depreciation on technical equipment 11,000 Administrative 13,000 Marketing 50,000 Sales Team Commissions (3% of selling price) 40,500 Distribution Commissions (25% of selling price) 337,500 Game Designer Royaties (12% of selling price) 162,000 Total Costs at Production of 300,000 Copies $737,000 The only variable costs are sales team commissions, distribution commissions, and the game designer royalties. How many downloads must Allied Games sell in order to generate operating earnings of 25% of sales revenue? (Round up your answer to the nearest whole download.)
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