Reference no: EM132038104

Question - In October 2014, Saldanha Sports Company sold soccer balls to its distributors for $18 each. The sales level of 40,000 soccer balls was less than the single shift capacity of 50,000 soccer balls at their plant in Granville, South Carolina.

These are the costs for October 1996:

Direct Labor costs $ 2 per ball

Direct Material Costs 4 per ball

Variable manufacturing 3 per ball support costs

Fixed manufacturing 122,000 per month support costs

Variable selling and 2 per ball administrative costs

Fixed selling and 52,200 per month administrative costs

(a) Compute the contribution margin per soccer ball in October 1996.

(b) Compute the gross margin per soccer ball in October 1996.

(c) Compute the sales level in number of soccer balls at which the profit on sales is 10%.