Sales Price per Unit $20 (current monthly sales volume is 35,000 units) Variable costs per unit Direct Materials $55,000 Direct Labor $40,000 Variable manufacturing overhead $25,000 Variable selling and administrative expenses $20,000 Monthly Fixed Costs Fixed Manufacturing overhead Fixed selling and administrative expenses $50,000 $100,000 Required: 1. Contribution Margin Ratio: You will take Sales price per unit divided by variable costs per unit and then divide that number by sales price er unit. (20-4)/20-.8 2. Variable Expense Ratio: This is the Variable Costs per Unit divided by the Sales Price per Unit. 4/20= .2 3. Break-even Point in Units: This is found by dividing Total Fixed Costs by the Contribution Margin per Unit. 150,000/.8= 187,500 4. Margin of Safety: This can be calculated in terms of both dollars and units. In dollars, it is Current Sales minus Break-even Sales. 700,000 187,500-512,500 5. Number of Units for Target Profit: 6. Impact of Union Settlement: 7. Number of Units to Sell Post-Downturn: 8. Impact of Decrease in Sales on Profitability: 9. Combined Impact of Sales Drop and Cost Increase: