Jay-Zee Company makes an in-car navigation system. Next year, Jay-Zee plans to sell 20,000 units at a price of $340 each. Produc
t costs include: Direct materials $71.00 Direct labor $41.00 Variable overhead $10.00 Total fixed factory overhead $619,950 Variable selling expense is a commission of 5 percent of price; fixed selling and administrative expenses total $93,600.
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Answer:
Average customer life value
CLV = 1260
Explanation:
Fis, we will calcualteteh gross margin.
For that we need the revenue:
We will calculate the average revenue per year:
50% 30 dollars per month = 180
40% 50 dollars per month = 240
10% 80 dollars per month = 96
average annual revenue per customer: 516
now we ill calcualte the gross margin:
revenue 516
maintenance (45)
administrative (30)
gross margin 441
CLV = 1260