XYZ Inc is a one-product firm and sells high-quality widgets. Widgets are sold for $10 each. Variable cost per widget is equal to $2 per unit. Total fixed cost is $1000 per month. Corporate income tax rate is 35%.

Required:

1) Compute the contribution margin per unit.

2)Compute the contribution margin ratio.

3) Find the break-even point in number of widgets to be sold per year.

4) Compute annual break-even revenue.

5) Compute annual expenses at the break-even point.

6) Compute profit before taxes and profit after taxes at the break-even point per year

7) If the firm requires a profit after taxes of $25 000per year, compute the required number of widgets to be sold per year.

8) Provide a break-even chart.