Treck Ltd manufactures and sells high ending bikes. Among its product range, the Superfry Model sells for $5,200 per unit. The production line has an annual fixed cost of $9,840,000. The business current requires a contribution margin of 35%.

Required

(a)Calculate the variable cost per unit, the breakeven point in selling unit and sales dollars. (9 marks)

(b)If the company wants to earn a before-tax profit of $1,000,000, how many units must be sold? What sales dollar level is required? What is the company's margin of safety at this sales level? (7 marks)

(c)If the company wants to earn a before-tax profit of 15% of sales, how many units must be sold? What are the sales dollars? (4 marks)