What is the fixed cost and contribution margin

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Reference no: EM131258913

JFP is losing market share and wants to either advertise or reduce its price. JFP needs to make $25,000 profit to stay in business. It has the following current operations profile:

Volume - 20,000

Price - 13

Variable Costs - 8

Monthly Profit - 35,000

(a) What is the JFP's Fixed Cost?

(b) What is JFP's Contribution Margin?

(d) What volume does JFP need to sell if it spends $10,000 on advertising and wants to stay in business?

(e) What volume does JFP need to sell if it reduces price by $1 and wants to stay in business?

Reference no: EM131258913

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