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Hot Locks Company developed the following information for its hair dryer sales. Sales price $40.50 per unit Variable cost of goods sold $10.50 per unit
Hot Locks Company developed the following information for its hair dryer sales. Sales price $40.50 per unit Variable cost of goods sold $10.50 per unit Fixed cost of goods sold $2,600,000 Variable selling expense $1.50 per unit. Variable administrative expense $1.00 per unit Fixed selling expense $40,000 Fixed administrative expense $30,000 For the year ended December 31, 2020, Hot Locks Company produced and sold 100,000 hair dryers Required: a) Calculate the contribution margin per unit. (3 marks) b) Calculate break even point in dollars (round to the nearest dollar). (2 marks) Calculate the margin of safety in units Explain what this means to the owner of Hot Locks Company. (3 marks) 3 A B
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