Reference no: EM132586121

For your first assignment, management has provided the following revenue and cost information:

                                                High-End Set                 Economical Set

Sales price                        $3,500 per unit         $1,000 per unit

Labor                                $875 per unit              $250 per unit

Materials                           $1400 per unit                 $300 per unit

Direct fixed costs                 $25,000 per month         $16,500 per month

Allocated fixed costs               $85,000 per month             $85,000 per month

Question 1: They want a better understanding of their business to make budgeting and sales goals decisions and have asked you to determine their:

1. Contribution Margins for each product line
2. Break-even quantities for each product line
3. Break-even quantities to earn $500,000 per year margin on the high-end line (at the current sales price)
4. Break-even quantities to earn $300,000 per year margin on the economical line (at the current sales price)