What is the products contribution per unit in dollars? d. What is the companys breakeven in units?
Innovation products international is a health foods company which recently discovered that increasd Show more Innovation products international is a health foods company which recently discovered that increasd soy isoflavones (at least 500 mg every 2 days) in a persons diet has been able to extend a persons life span by at least 20 years. The company developed a new product called Soy for Life which is a tasty breakfast bar that contains 500 mg of soy isoflavones in each bar. Cost of research and development for the product was $2250000. The breakfast bar market size is currently measured at 80 million units of which IPI serves 45%. Initial taste tests concluded that consumers are unable to make any taste distinctions between a regular breakfast bar and one that contains 500 mg of isoflavones. IPI plans to lunch this new breakfast bar initially across the United States using its current distribution channel of supermarket chains and health food stores which have 5000 locations combined. Innovation Product Internationals fixed costs is currently $1 million per year with the cost to produce each breakfast bar at 1.25$. The finding of several research studies has determined that consumers would be willing to pay 8.25$ for Soy for Life breakfast at which the retail selling price would be targeted. The retailer margine is 35% and then wholesale margin is 15%. a. What is the companys selling price of one Soy for Life breakfast bar to its wholesalers? (from my calculations its 4.125$) b. What is the products contribution margin as a percentage? c. What is the products contribution per unit in dollars? d. What is the companys breakeven in units? e. What is the companys breakeven in dollars? f. What is the companys breakeven sahre of market as a percentage? Show less
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