Raw material $3.00 per unit
Direct labour 1.94 per unit
Sales commissions 0.96 per unit
Shipping expense 0.35 per unit
Variable overhead 0.58 per unit
Indirect materials 2,000
Administrative salaries 35,000
Utilities 21,000
Rent 16,000
Miscellaneous costs 3,000
Insurance 7,000
Advertising expense 120,000 10%
Amortization 2,400
Shipping expense 10,000
Marketing report 2,000
Capital expenditure (year 1) 40,000
Upgrade (year 4) 6,000
Discount rate 9%
Tax rate 38%
CCA rate, machinery 20%
Sales (in units) 55,000 35,000 20,000
Selling price $8.00 $13.00 $17.00
Selling Price
Variable cost per unit
Contribution margin
Units
Total contribution margin
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