Cost-volume-profit analysis Di & Co. has the following budgeted information for a contract: - Fixed costs $ 270,000 Variable cost per unit $ 20 Selling price per unit $ 40

Budgeted output / sales units 15,000 Required: (a) Compute the number of units that must be sold to breakeven.

(b) How many units must be sold to earn $80,000 target profit?

(c) What selling price would have to be charged to give a profit of $80,000? (d) How many additional units must be sold to cover an extra fixed cost of $12,000? (assuming selling price and variable cost per unit are constant) (e) What is the profit-volume ratio? (f) Referring to part (e) above, if total sales revenue is $550,000, what is the total contribution and hence what is the net profit?

(g) Referring to part (a), what is the margin of safety? (h) What does the term relevant range mean?