Tech manufactures $1$GB pen drives. Price and cost data for a relevant range extending to $200,000$ units per month are as follows:

SP$($ SALES VOLUME IS $120000$ UNITS$)20$

VC PER UNIT$($ DM$=$ $$6\mathrm{.}4$; DL$=$$$5$; VMOH$=$ $$2\mathrm{.}2$; V SELLING EXP$=$$$1\mathrm{.}4015$

MONTHLY FIXED COST$($ F MOH$=$$$191400$; F SELLING EXP$=$ $$276600)468000$

CALCULATE:

What is the company$$s contribution margin per unit? Contribution margin percentage? Total contribution margin?

What would the company$$s monthly operating income be if the company sold $150,000$ units?

What would the company$$s monthly operating income be if the company had sales of $$4,000,000?$

What is the break$-$even point in units? In sales dollars?

How many units would the company have to sell to earn a target monthly profit of $$260,000?$

Management is currently in contract negotiations with the labour union. If the negotiations fail, direct labour costs will increase by $10\%$ and fixed costs will increase by $$22,500$ per month. If these costs increase, how many units will the company have to sell each month to break even?

Return to the original data for this question for the remaining questions. What is the company$$s current operating leverage factor, rounded to two decimals?

If sales volume increases by $8\%,$ by what percentage will operating income increase?

What is the firm$$s current margin of safety in sales dollars? What is its margin of safety as a percentage of sales?

Say Tech Co adds a second line of flash drives $(2$GB rather than $1$GB$).$ A $2$GB flash drive will sell for $$45$ and have variable cost per unit of $$20$ per unit. The expected sales mix is three small flash drives for each large flash drive. Given this sales mix, how many of each type of flash drive will FlashCo need to sell to reach its target monthly profit of $$260,000?$ Is this volume higher or lower than previously needed $($in Requirement $5)$ to achieve the same target profit? Why?