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What is the revenue level

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Question - UG Inc (UG) Manufacturers and sells coffee bean grinders. UG sells its grinders to restaurants and coffee shops through a network of sales agets who are paid soley on commissions of 10% of sales. In Fy2020, UG sold 10,000 grinders at an average price of $125.

1) What is the total contribution margin in FY 2020?

2) What is the breakeven point of revenue in $?

3) UG aims to achieve an operating profit of 15%. From the information provided above, what is the revenue level in $ needed to achieve their 2021 operating profit goal?

4) UG wants to replace their commissioned sales agents with an in-house sales force estimated to cost 200,000 with no sales commission. Using the information above, what is the level of revenue in UNITS SOLD which will generate the same operating profit under both cost structures?

Reference no: EM132998924

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