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A company sells a single product with the following details: Selling price per unit: $40 Variable cost per unit: $25 Fixed costs: $75,000 Requirements: Calculate

A company sells a single product with the following details:

  • Selling price per unit: $40
  • Variable cost per unit: $25
  • Fixed costs: $75,000

Requirements:

  1. Calculate the contribution margin per unit.
  2. Determine the contribution margin ratio.
  3. Compute the break-even point in units.
  4. If the company wants to achieve a target profit of $30,000, how many units must it sell?
  5. Calculate the operating leverage at the break-even point.

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