Calculate markup price and contribution margin

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Reference no: EM1346678

Diamond Machine Technology makes a tool for sharpening the blades of pruning sheers and grass clippers. The company has invested $250,000 in developing this sharpener, which it would like to make back in the first year. This tool is about the size of a piece of chewing gum and costs $3 to make. Fixed costs for the sharpener are $10,000 per month. Diamond Machine's markup on sales is 30 percent.

Calculate: a.) its markup price; b.) contribution margin; c.) monthly breakeven volume; d.) year one breakeven volume with expected level of profit

Reference no: EM1346678

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