# 3. Focus Features (Focus) markets video equipment and movies through a variety of retail outlets. Presently,...

###### Question:

3. Focus Features (Focus) markets video equipment and movies through a variety of retail outlets. Presently, Focus is faced with a decision as to whether it should obtain the distribution rights to an unreleased film titled, Harriet. If this film is distributed by Focus directly to large retailers, its investment in the project would be $150,000. Focus estimates the total market for the film to be 100,000 units. Other data available are as follows: Cost of distribution rights for film Label design Package design Advertising Reproduction of copies (per 1,000) Manufacture of labels and packaging (per 1,000) Royalties (per 1,000)$125,000 5,000 10,000 35,000 4,000 500 500 Focus' suggested retail price for the film is \$20 per unit. The retailer's margin is 40 percent. a) What is Focus' unit contribution and contribution margin? b) What is the breakeven point in units? In dollars? c) What share of the market would the film have to achieve to earn a 20 percent return on Focus' investment the first year?

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