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(30 Points) 2. Zippo Inc manufactures digital cameras that sell for $240 each. Annual fixed costs total $4,850,000 while variable costs are $92 per unit.
(30 Points) 2. Zippo Inc manufactures digital cameras that sell for $240 each. Annual fixed costs total $4,850,000 while variable costs are $92 per unit. The company is subject to a 32% corporate tax and wants to earn an after-tax profit of $975,000. (a) What is the contribution margin? (b) What is the contribution margin ratio? (c) What is the breakeven point in sales dollars? (d) How many units must the company sell to reach its after-tax profit goal? (e) If Zippo increased the selling price by 10%, what would the breakeven point in units be? (f) If Zippo's variable cost increased 10% and its fixed cost decreased by $850,000, how many units would Zippo have to sell to have after-tax profit of $1,200,000
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