Question
Company ABC presents the following information about the sales of its product: Sale Price $40.00 per unit Variable Costs $25.00 per unit Fixed Costs (total).
Company ABC presents the following information about the sales of its product:
Sale Price $40.00 per unit Variable Costs $25.00 per unit Fixed Costs (total). $60,000
In 2023 the company sold 15,000 units. Required:
1. Determine the contribution margin per unit and total contribution margin.
2. Determine the tie point in units and in dollars.
3. Determine the company's margin of safety.
4. Determine the units that must be sold and the sales in dollars to make a profit of $300,000.
5. ABC wants to know by how much the firm's net income would increase with an increase in sales ($) of $55,000. To achieve that increase, additional fixed costs of $13,000 will be incurred.
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