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......First year contribution
|Heater/Blower Contribution (1,401,955) + |Blanket Contribution (x1000) (16,908)= |System Contribution |
| | |1,418,863 |
|Price (discounted) Direct Costs |(x 1000) | |
|729,396.5 535,420 |11,835.6 1,197.6 |204,614.5 |


Breakeven in systems (units)
|B/E Units (year one) = 799 units |
|Fixed Cost ($500,000)/ System Contribution = 2.44 |

(2) $1,499 for the blower and $20 for the blanket
This is a variable pricing strategy as it considers the costs incurred in the production and distribution of the Bair Hugger Patient Warming System
First year contribution
|Heater/Blower Contribution (2,112,091) + |Blanket Contribution (x1000) (28,180)= |System Contribution |
| | |2,140,271 |
|Price (discounted) Direct Costs |(x 1000) | |
|1,478,463.7 535,420 |19,726 1,197.6 |961,572.7 |


Breakeven in systems (units)
|B/E Units (year one) = 439 units |
|Fixed Cost ($500,000)/ System Contribution = 0.52 |

(3) $3,995 for the blower and $22 for the blanket
This a skimming pricing strategy as it implements a significantly higher price than the competition
First year contribution
|Heater/Blower Contribution (5,628,955) + |Blanket Contribution (x1000) (28,180)= |System Contribution |
| | |5,657,135 |
|Price (discounted) Direct Costs |(x 1000) | |
|3,940,268.5 535,420 |19,726

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