QUESTION ONE:

Contribution Margin

Weidner Company sells 22,000 units at $30 per unit. Variable costs are $24 per unit, and fixed costs are $40,000.

Determine (a) the contribution margin ratio, (b) the unit contribution margin, and (c) income from operations.

QUESTION TWO:

Elrod Inc. sells a product for $75 per unit. The variable cost is $45 per unit, while fixed costs are $48,000.

Determine (a) the break-even point in sales units and (b) the break-even point if the selling price were increased to $95 per unit.