E 5. Senora Company manufactures a single product that sells for $110 per unit. The company projects sales of 500 units per month. Projected costs are as follows:

Type of Cost Manufacturing Nonmanufacturing Variable $10,000 $5,000 Nonvariable $12,500 $7,500 1. Prepare a contribution margin income statement for the month.

2. What is the contribution margin ratio?

3. What volume, in terms of units, must the company sell to break even?

Contribution Margin Income Statement and C-V-P Analysis