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 new cd:

CD Package and Disc $1.25/cd

Songwriters Royalties $0.35/cd

Recording Artists Royalties $1.00/cd

Ad and Promotion $275,000

Studio Recording Inc Overhead $250,000

Selling Price to CD Distributor $9.00

Calculate the necessary CD Unit Volume To Achieve a $200,000 profit ...

Question

Mathematics

Jadiel Roy

15 July, 08:25

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 new cd:

CD Package and Disc $1.25/cd

Songwriters Royalties $0.35/cd

Recording Artists Royalties $1.00/cd

Ad and Promotion $275,000

Studio Recording Inc Overhead $250,000

Selling Price to CD Distributor $9.00

Calculate the necessary CD Unit Volume To Achieve a $200,000 profit ...

+3

Answers (1)

Know the Answer?

Hezekiah Fields · Answer 1

Let the required CD unit volume be x, then

Total cost = 1.25x + 0.35x + x + 275000 + 250000 = 2.6x + 525000

Total revenue = 9x

Profit = Total revenue - Total cost = 9x - (2.6x + 525000) = 200000

6.4x - 525000 = 200000

6.4x = 200000 + 525000 = 725000

x = 725000 / 6.4 = 11328.125

Therefore, to achieve a profit of $200,000; 11,329 Cd's has to be sold.