To pay for his academic fees, Tarek, a college student, is selling used cell phones to other students. His cost to purchase each piece is $53, and he is planning to sell the phones for $99 each. Fixed costs for advertising amount to $500.
For each of the following, perform a break-even analysis showing computation of the
(a) Contribution margin;
(b) Contribution rate;
(c) Break-even point in units;
(d) Break-even point in sales dollars.