Problem - Break-Even Point and Target Profit Measured in Units (Single Product). Nellie Company has monthly fixed costs totaling $100,000 and variable costs of $20 per unit. Each unit of product is sold for $25.
Required:
1. Calculate the contribution margin per unit?
2. Find the break-even point in units?
3. How many units must be sold to earn a monthly profit of $40,000?
4. Calculate the contribution margin ratio?
5. Find the break-even point in sales dollars?
6. What amount of sales dollars is required to earn a monthly profit of $60,000?
Assume Nellie Company expects to sell 24,000 units of product this coming month.
7. Find the margin of safety in units?
8. Find the margin of safety in sales dollars?