The salespeople at Pearl, a notebook manufacturer, commonly pressured operations managers to keep costs down so the company

could give bigger discounts to large customers. Gary, the operations supervisor, leaked the $$0\mathrm{.}60$ total unit cost to salespeople, who

were thrilled, since that was slightly lower than the previous year's unit cost. Budgets were not yet finalized for the upcoming year, so

it was unclear what the target unit cost would be$.$ Gary knew the current year's operating capacity was two million notebooks, and

Pearl produced and sold just that many. The detailed breakdown of the $$0\mathrm{.}60$ total unit cost is as follows.

$($a$)$

What were Pearl's total fixed costs? If the average selling price was $$2\mathrm{.}05,$ how much gross margin did the company generate?

Total fixed costs $

Gross margin $