Evaluate pattersons contribution margin per unit

Reference no: EM134925

Q. Parkas Company's sale revenue is $30 per unit, variable costs are $19.50 per unit, and fixed costs are $147,000.

a- Evaluate Patterson's contribution margin per unit and contribution margin ratio

b- Evaluate the number of units Patterson must sell to break even

c- Evaluate the sales revenue required to earn (pretax) income equal to 20% of revenue.

d- How many units must Patterson sell to generate an after tax profit of $109,200 if the tax rate is 35%

e- Patterson is considering increasing its advertising expenses by $38,500.How much of an increase in sales units is required from expanded advertising to justify this expenditure(generate an incremental contribution margin of $38,500)?

Reference no: EM134925

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