Reference no: EM132474484

Monster Inc., the maker of personal computer games has been contacted by Hot Stuff, Inc., which has developed a new technology for personal computer garners which provides a new challenge for gamers. The new technology consists of a seat pad for the gamer's chair which is connected to a control unit which is then connected to the personal computer. When the gamer makes an error while playing Daytona 500 he/she receives a "mild" electric shock through the seat pad. The new technology which has received

• extremely positive reviews from a panel of gamers, consists of the Daytona 500 game CD, the seat pad, the control unit and cables. In tests, by Monster Inc., the new technology has performed flawlessly, is considered safe and Monster Inc. is considering licensing Hot Stuffs new gamer technology. The following cost information pertains to the new technology:

•	Hot Stuff Daytona 500 software license.........	$200,000
•	New equipment to produce seat pads.............	$50,000
•	Advertising......................................................	$150,000
•	Royalties (per 100 CDs).................................	$500
•	Material and labor (per 10 pads)...................	$150
•	Cables (per unit).............................................	$5

Market research estimates that the market for the new Daytona 500 game and "Hot Stuff" is 1,000,000 units at a retail price of $75, which includes the game CD, seat pad, control units and cables.Monster Inc. traditionally sells through major retailers like BestBuy. The retailer's traditional margin is 20%

Question a) How much revenue does Monster Inc. receive for each unit sold?

Question b) What is Monster Inc.'s contribution margin per unit?

Question c) What is the break-even volume in units?

Question d) How many units did Monster sell if Total Sales Revenue = $1,000,000?

Question e) What is the profit if Monster's Total Sales Revenue = $1,000,000?