Break-Even and Cost-Volume-Profit Analysis.

The Magic Silicon Manufacturing Company produces a product called Slipitey Slide on a line in one of its plants. The following data have been collected about this product on a per unit basis.

Sales niCe: gies chute eae $ 100 Variable costs:

Matenial tt es. cos sengt eit 45 Processing sxizif 92's iis wxscian Ss 10 Total variable costs ....... 55 Contribution Margin ........ $45 Traceable monthly fixed cost . $18,000 Required:

Compute the monthly break-even sales in dollars.

Compute the monthly contribution margin in dollars for sales of 1,000 units.

If the company sells 500 units in one month, what unit sales price must the company charge to generate a contribution margin of $30,500?

d. Assume the company normally sells 900 units per month. Compute the profit increase or decrease (indicate which) if the company drops the product from its product line.