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Patty has just graduated university and is thinking about opening 'Surf Shop to manufacture and sell surfboards. Patty estimates that the direct materials cost per
Patty has just graduated university and is thinking about opening 'Surf Shop" to manufacture and sell surfboards. Patty estimates that the direct materials cost per surfboard is $75.00 and the direct labour cost per surfboard is $100. Other variable production costs would be $ 25 per unit. Patty estimates that each surfboard can sell for $300.00. Other costs include rent for the facility of $24,000 annually, advertising of 516,000 annually and a manager's salary of $50,000 per year. Required: You must show all your calculations in order to get marks. If you provide the answer only you will not receive any marks. What is the contribution margin per unit in $5. 1. 2. What is the contribution margin ratio? 3 What is the break-even point in units? 4 What is the break-even point in sales dollars? 5 How many units need to be sold to eam $ 210,000? Required: You must show all your calculations in order to get marks. If you provide the answer only you will not receive a 1. What is the contribution margin per unit in $. 2. What is the contribution margin ratio? 3. What is the break-even point in units? 4. What is the break even point in sales dollars? 5. How many units need to be sold to earn $ 210,000? 6. If Surf Shop is operating at 10 units below break even what is the total loss? 7 If Surf Shop sells 8,000 surfboards what is the expected profit
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