Cost-Volume-Profit Analysis

Bright Corporation manufactures and sells searchlights. Each searchlight sells for $875. The variable cost per unit is $630, and the company's total fixed costs are $775,000.

Requirement 1:

Calculate the company's contribution margin per unit and the contribution margin ratio.

$ and %

Requirement 2:

Calculate the sales in units needed for the company to break even. Keep in mind that the company cannot sell partial units.

Requirement 3:

Calculate the sales in units needed for the company to achieve a target net operating income of $98,000.

Requirement 4:

Calculate the sales in units that would be needed for the company to break even if variable costs increased by $40 per unit.