A manufacturing company incurs fixed costs of $100,000 and variable costs of $20/unit. The selling price per unit is $50. The company expects to sell 6,000 units.

• Requirements:
  • Calculate the total contribution margin and contribution margin ratio.
  • Determine the break-even point in units and sales dollars.
  • Perform a sensitivity analysis assuming a 10% increase in variable costs.
  • Recommend pricing strategies to achieve a target profit of $50,000.