Easywriter manufactures an erasable ballpoint pen which

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EasyWriter manufactures an erasable ballpoint pen, which sells for $1,75 per unit. Management recently finished analyzing the results of the company's operations for the current month. At a break-even point of 40,000 units, the company's total variable costs are $50,000 and its total fixed costs amount to $20,000. A-Calculate the contribution per unit. B-Calculate the company's margin of safety if monthy sales total 45,000 units. C-Estimate the company's monthly operating loss if it sells only 38,000 units. D-Compute the total cost per unit at a production of of (1) 40,000 pens per month and (2) 50,000 pens per month. Explain the reason for the change in unit costs.

Reference no: EM13603959

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