Question 2

A-AAA Manufacturing Company has the following information about its product:

Selling price per unit	$50
Fixed costs	$200,000
CM Ratio	30%

Required:

1. Calculate the variable cost per unit.

2. Assume that the companyplans to sell 15,000 units this year. In your opinion, did you think the Company would be better off with this plan? Support your answer with necessary calculations

3. How many units the company needs to sell to reach a break-even? Proof your answer.