The Campcraft Company is a small manufacturer of camping trailers. The company manufactures only one model and

Question:

The Campcraft Company is a small manufacturer of camping trailers. The company manufactures only one model and sells the units for $2,500 each. The variable costs of manufacturing and selling each trailer are $1,600. The total fixed cost amounts to $180,000 per year.

Required: (1) Compute Campcraft’s contribution margin per trailer.

(2) Compute Campcraft’s profit (or loss) at a sales volume of 160 trailers.

(3) Compute the number of units that Campcraft must sell for it to break even.

(4) Compute the number of units that Campcraft must sell for it to earn a profit of $31,500.

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