Senora Company manufactures a single product that sells for $110 per unit. The company projects sales of 500 units per month. Projected costs are as follows:

Type of Cost Manufacturing Nonmanufacturing

Variable $10,000 $5,000

Non variable $12,500 $7,500

1. Prepare a contribution margin income statement for the month.

2. What is the contribution margin ratio?

3. What volume, in terms of units, must the company sell to break even?