A. Using the above information, calculate the following items, being sure to show all calculations and clearly labeling your answers:

1. Contribution margin per unit

2. Contribution margin ratio (do not round your answer)

3. Break-even point in units

4. Break-even point in dollars

B. Explain what happens at the break-even point and why companies do not want to remain at the break-even point.

C. How many Custom wedding cakes does Suncat Cake Shop need to sell in order to realize a target profit of $50,000? Show all calculations and clearly label your answer.

D. What dollar sales will Suncat Cake Shop need to generate in order to realize a target profit of $50,000? Show all calculations and clearly label your answer.

\begin{tabular}{|l|c|} \hline Selling price per Custom wedding cake & $800 \\ \hline Variable cost per Custom wedding cake & $425 \\ \hline Total fixed costs & $72,500 \\ \hline \end{tabular}