Calculate the contribution margin per unit calculate the

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Reference no: EM13390065

The Peace Company has the following functional income statement for the prior month.    

Sales        

($50 * 100,000 units)       

 

$5,000,000        

Cost of goods sold       

 

 

 

Direct materials       

$1,200,000        

 

 

Direct labor       

$950,000       

 

 

Variable factory overhead       

$600,000        

 

 

Fixed factory overhead       

$850,000       

$3,600,000        

Gross profit       

 

 

$1,400,000

Selling and administrative expense       

 

 

 

 

Variable       

 

 

 

Fixed       

 

 

Operating income       

 

 

 

There were no beginning and ending inventories.       

 

 

Required:    

1. Calculate the contribution margin per unit.

2. Calculate the contribution margin ratio.

3. What is the break-even point in units?

4. What is the amount of sales in dollars needed to obtain a before-tax profit of $40,000?

Reference no: EM13390065

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