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Cammie Inc.'s manufacturers a single product which sells for $63.00 per unit. Variable costs are $40.00 per unit and total fixed costs are $253,000 per
Cammie Inc.'s manufacturers a single product which sells for $63.00 per unit. Variable costs are $40.00 per unit and total fixed costs are $253,000 per year. Required (A) What is the contribution margin per unit and the contribution margin ratio? (B) In your own words, describe what the terms contribution margin per unit and contribution margin ratio mean, and describe the difference(s) between these two terms. (C) Compute the number of units that the company must sell to break-even. (D) How many units would the company have to sell to earn a target (pretax) income equal to 20% of sales revenue? (E) How many units must the company sell to earn after-tax profit of $152,720? Assume that the tax rate is 30%. (F) To increase sales, management is considering running an advertising campaign. The cost of the advertising is estimated to be $50,600. How many additional units must the company sell to justify the advertising expenditure
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