Sport Caps manufactures and sells caps. Fixed costs are \(\$ 150,000\) per month, and variable costs are \(\$ 5\) per cap. The caps are sold for \(\$ 8\) each. Production capacity is 100,000 caps per month.

Required

1. Compute the following.

a. Contribution margin per cap.

b. Break-even point in number of caps sold.

c. Income at 30,000 caps sold.

d. Income at 85,000 caps sold.

e. Number of caps sold to get \(\$ 60,000\) of income.

2. Compute the following.
a. Contribution margin ratio.
b. Break-even point in sales dollars.
c. Income at \(\$ 250,000\) of sales.
d. Income at \(\$ 600,000\) of sales.
e. Dollars of sales to achieve \(\$ 60,000\) of income.