Carrie Sells Three Products Total Fixed Costs Are $100,000 Marketing and $125,000 Administrative

question 114

Essay

Carrie sells three products. Last month's results are as follows:
$$\begin{array} { l c c c c } & \mathrm { P } 1 & \mathrm { P } 2 & \mathrm { P3 } \\\text { Reverues } & \$ 1 5 0 , 0 0 0 & \$ 2 2 5 , 0 0 0 & \$ 2 2 5 , 0 0 0 \\\text { Variable costs } & 60,000 & 210,000 & 120,000\end{array}$$
Total fixed costs are $100,000 marketing and $125,000 administrative.
Required:
(a) What was the contribution margin ratio?
(b) What sales volume does Carrie need to achieve a $100,000 monthly profit?
(c) What will profit be if Carrie increases sales by 20%?

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Definitions:

Startups

are newly established businesses, typically in the technology sector, characterized by their innovative products or services and scalability.

Flexible

Capable of being easily modified to adapt to new conditions or circumstances without significant difficulty.

Customer Value Proposition (CVP)

A business or marketing statement that describes why a customer should buy a product or use a service, focusing on the unique value the product or service provides.

Effective

Refers to something being successful in producing a desired or intended result.