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Fifa Company has a product that sells for $20 per unit. The variable expenses are $12 per unit, and fixed expenses total $30,000 per year.

Fifa Company has a product that sells for $20 per unit. The variable expenses are $12 per unit, and fixed expenses total $30,000 per year.

Required:

i. Calculate contribution margin ratio for the product. (2 marks)

ii. Calculate the break-even point. (3 marks)

iii. The marketing manager wants to increase advertising by $6,000 per year. How many additional units would have to be sold to increase overall net operating income by $2,000? (5 marks)

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