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Calculate the contribution margin per unit

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Question - Letel manufactures paper plates, which sells for $1.85 per unit. Management recently finished analyzing the results of the company's operations for the current month. At a break-even point of 60,000 units, the company's total variable costs are $75,000 and its total fixed costs are unt to $28,000.

a. Calculate the contribution margin per unit.

b. Calculate the company's may gin of safety if monthly sales total 65,000 units.

c. Estimate the company's monthly operating loss if it sells only 45,000 units.

d. Compute the total cost per unit at a production level of (1) 50,000 paper plates per month and (2) 60,000 paper plates per month. Explain the reason for the change in unit costs.

Reference no: EM133145586

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