Units produced and sold: 10,000

		Total	Per Unit
Revenue:		$8,000,000	$800.00
Less: Costs
	Advertising (all fixed)	1,000,000	$100.00
	Administrative office salaries	720,000	$72.00
	Commission paid to sales representatives	400,000	$40.00
	Depreciation on factory machines	100,000	$10.00
	Factory supervisor salary	130,000	$13.00
	Labor of factory machine operators	800,000	$80.00
	Paint used to coat tables	250,000	$25.00
	Property taxes on factory building	500,000	$50.00
	Wood and metal used in tables	1,500,000	$150.00
Net operating income		2,600,000	$260.00

1. Compute the net operating income when the number of units produced and sold is 8,000.

2. Assume Corp has a corporate income tax rate of 25%. Compute the number of ping pong tables that must be sold in order to generate an after-tax profit of $3,000,000.

The Dairy Dandy sells cups of ice cream and cups of frozen yogurt. It noted the following information about its business.

Cup of ice cream: Selling price $5.50; contribution margin $3.00

Cup of frozen yogurt: Selling price $7.00; contribution margin $4.00

Monthly fixed costs: $11,450

Sales mix in units: 75% ice cream cups; 25% cups of frozen yogurt

The owner expects selling prices, variable costs and fixed costs to remain stable over the next year.

3. Compute the overall weighted-average contribution margin per cup for the Dairy Dandy using its current sales mix.