Peter Garcia Meza is considering buying a company if it will break even or earn net income on revenues of $80,000 per month. The company that Peter is considering sells each unit it produces for $5. Use the following cost data to calculate the break-even point in units and sales dollars.

Fixed Costs

Variable Cost

$51,000

$2 per unit

1. What is the contribution margin per unit?
2. What is the breakeven point in units?
3. What is the contribution margin ratio?
4. What is the breakeven point in dollars?
5. Should Peter buy this company?Why or why not?

AutoSave OFF 3 Ch 5 Homework Q v Home Insert Draw Page Layout Formulas Data Review View Share Comments A A ab v Conditional Formatting Insert v EVAC Format as Table v x Delete v Paste I UV V V Av 27 v $ % 9 Cell Styles v Format v X v Sort & Find & Ideas Sensitivity Filter Select 166 X V fx A B C D E F G H K L M N 30 Analysis: 31 32 33 34 35 Alternate Problem C 36 1 and 2. Current Level Hint? 37 Variable cost per unit = 38 39 Contribution margin per unit CM ratio 40 41 Breakeven in Units = Breakeven in Sales = 42 43 44 45 46 47 3. Earn income of $144,000 SELF CHECK ONLY 48 Units to Reach Target Income 49 50 51 Sales to Reach Target Income 52 53 54 55 4. Sales UNITS required to earn $144,000 if selling price $14.40 56 57 Contribution margin per unit 58 59 60 61 62 63 64 65 66 Sheet1 Sheet3 + + 100%