Question:
Use this income statement to answer the questions that follow.
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Sales ($50 per unit)
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$5,000
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Less: Cost of goods sold ($32 per unit)
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3,200
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Gross margin
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1,800
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Less operating expenses:
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|
|
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Salaries
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$800
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|
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Advertising
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400
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Shipping ($2 per unit)
|
200
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1,400
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Operating Income
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$ 400
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Required
1.What is the variable cost per unit?
2.What is the total fixed expense?
3.What is the contribution margin per unit?
4.What is the contribution margin ratio?
5.What is the breakeven point in units? In dollars?
6.What is the margin of safety in units? In dollars?