Question 1. To pay for his academic fees, Tarek, a college student, is selling a computer accessory to other students. His cost to purchase each piece is $80, and he is planning to sell the accessories for $103 each. Fixed costs for advertising amount to $580. (a)Compute the contribution margin. (b)Compute the contribution rate. (c)Compute the break-even point in units. (d)Compute the break-even point in sales dollars.

Question two: The data to the right pertain to the operating budget of a manufacturing company. Compute the following.

(a) contribution margin

(b) contribution rate

(c) break-even point in sales dollars

Question three: Tina, an entrepreneurial business student, wants to set up a business completing tax forms for other students. Her price would be

$48.00

for each job. Fixed expenses include

$322.00

for the tax software which Tina would purchase. Tina would hire some accounting students to complete the forms, paying them for

two

hours at $10 per hour for each job. She would also have paper and supplies costs of $5 per job. How many jobs would she have to generate before she starts to make a profit? Make the assumption that it takes an accounting student two hours to complete one tax return.