DEF Company produces a single product that currently sells for $200 per unit. The direct material cost and direct labor cost per unit of this product are $100 and $20 respectively. DEF Companys factory rent is $120,000 per year and the annual salary of factory supervisor is $120,000.

Required: 1 Compute the following amounts for DEF Company: a. Contribution margin per unit b. Break-even point in units c. Contribution margin percent d. Break-even point in dollars e. The profit that DEF Company will earn at a sales volume of 4,000 units f. The number of units that DEF Company must sell to earn a profit of $240,000 (60 marks) 2 After restructuring the production line, DEF Company decreases its selling price to $180 per unit and increases its total fixed cost to $300,000. Variable cost per unit remains unchanged. Compute: a. Contribution margin per unit b. Break-even point in units d. The degree of operating leverage if the sales units are 7,500.