Problem:
The following information relates to the three bullets bellow.
Company A sells several products for an average price of $20 per unit and the average flexible costs per unit are as follows:
Direct material $4.00
Direct labor $1.60
Indirect manufacturing costs $0.40
Selling commissions $2.00
Company A's annual capacity-related costs total $96,000.
1. The contribution margin per unit is:
2. The number of units that Company A must sell each year to break even is:
3. The number of units that Company A must sell annually to make a profit of $144,000 is: