A manufacturing company produces a product with variable costs of $15/unit and fixed costs of $50,000. The selling price per unit is $30. The company expects to sell 5,000 units.

• Requirements:
  • Calculate the contribution margin per unit and total contribution margin.
  • Determine the break-even point in units and sales dollars.
  • Prepare a contribution margin income statement.
  • Discuss how changes in sales volume affect profitability.