Albert Inc, a sole proprietorship, sells only one product. The regular price is $275. Variable costs are 60% of this selling price, and fixed costs are $35,500 a month. Management decides to decrease the selling price from $275 to $250 per unit. Assume that the cost of the product and the fixed operating expenses are not changed by this pricing decision.

(a) At the original selling price of $275 a unit, what is the contribution margin ratio? - - - - - -- %

(b) At the original selling price of $275 a unit, what dollar volume of sales per month is required for Albert Inc to break-even? $_ _ _ _ _ _ _

(c) At the original selling price of $275 a unit, what dollar volume of sales per month is required for Albert Inc to earn a monthly operating income of $20,750? $_ _ _ _ _ _ _

(d) At the reduced selling price of $250 a unit, what is the contribution margin ratio? - - - - - - - %

(e) At the reduced selling price of $250 a unit, what dollar volume of sales per month is required to break-even? $_ _ _ _ _ _ _

B) Explain the significance of Contribution Analysis for an Organization with special reference to the example above