Alternate problem C Jefferson Company has a plant capacity of 100,000 units, at which level variable costs are $720,000. Fixed costs are expected to be $432,000. Each unit of product sells for $12.

1. Calculate the companys contribution margin ratio and contribution margin per unit.

2. Determine the companys break-even point in sales dollars and units.

3. At what level of sales units and sales dollars would the company earn net income of $144,000?

4. If the selling price were raised to $14.40 per unit, at what level of sales units would the company earn $144,000?

Alternate problem E See Right Company makes contact lenses. The company has a plant capacity of 27,000 units. Variable costs are $20 per unit. Fixed costs are $2,000,000 per year. The selling price is $100 per unit.

1. Compute the break-even point in units.

2. How many units would have to be sold to earn $200,000 per year? Is this possible? Why or why not?

67 Alternate Problem E 68 1. Current 70 71 72 73 74 2. Earn $200,000 per year 75 76 78 Analysis