Entry Rules:

For dollars, round your answer to the nearest whole number.

Examples:

If your answer is $24,500.47, enter 24500

If your answer is $24,500.51, enter 24501

If your answer is $24,500.00, enter 24500

Never enter $ or , when inputting numerical answers

For percentages, round your answer to the nearest whole number.

For example, 2 / 6 = 0.33333333 x 100% = 33.3333333....%

You would enter your answer as 33

QUESTION:

Gerhard plans to make and sell ball caps at the Blue Jay's game.

Expected sales	5,000	units
Selling price	$20	per cap
Direct material	$8	per cap
Direct labour	$4	per cap
Variable overhead	$2	per cap
Variable selling commission	$1	per cap
Fixed sell. & admin. expense	$600	total
Fixed factory overhead	$800	total

Using the above information answer the following questions.

What is the total variable cost per unit?

What is the total fixed costs?

What is the contribution margin per unit?

What is the contribution margin ratio?

HINT: Remember the entry rules for percentages.

What is the break-even number of ball caps?

What is the variable cost ratio?

HINT: Remember the entry rules for percentages.

What is the break-even in sales dollars?

The company would like to earn a target income of $4,000. How many ball caps will the company have to sell in order to earn this target income?

The company would like to earn a target income of $4,000. The total sales revenue required to earn an income this target income is $__________.