Question:

A company sells watches for $1,500. The unit variable cost is $500. Fixed manufacturing costs total $50,000 and fixed selling and administrative costs totals $25,500.

a. Calculate the CM per watch

b. Calculate the B/E in unit and dollars per watch

c. Calculate the MOS in units and dollars if the company sold 115 watch

d. Calculate the number of watches the company must sell to earn a profit of $90,000