Suppose that Adams Company sells a product for $19. Unit costs are as follows:

Direct materials

$1.95

Direct labor

1.50

Variable factory overhead

2.05

Variable selling and administrative expense

0.96

Total fixed factory overhead is $51,658 per year, and total fixed selling and administrative expense is $38,630.

Required:

1.

Calculate the variable cost per unit and the contribution margin per unit.

2.

Calculate the contribution margin ratio and the variable cost ratio.

3.

Calculate the break-even units.

4.

contribution margin income statement at the break-even number of units.