The car company manufactures and sells Waxworks car polish. This expensive polish is priced at $20 per can (applicator sponge included). Car Companys costs are:

Fixed costs (per month) Variable Costs per can

Manufacturing $500000 Manufacturing $11

Selling costs 292000 Selling 3

.Find the monthly breakeven quantity using the above data.

2.How many cans must be sold to earn $60000 per month above breakeven (before taxes)?

What is the Contribution Margin Ratio (CMR), using the costs in (2)?

4. If variable selling costs increase by 20% per can, what is the new break-even quantity, assuming $60000 per month before taxes is to be earned?

Assuming a 40% tax rate, how many cans must be sold to earn an after-tax income of $90000 above breakeven, and assuming selling costs increase 20% per can?

What is the DOL in (4) above?