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Rainbow Corporation manufactures a single product. The selling price is $120 per unit, and variable costs amount to $76 per unit. The fixed costs are $28,400 per month.
Problem (a) What is the contribution margin per unit? $_______________ per unit
Problem (b) What is the contribution margin ratio? _______________% (Rounded to 1 decimal place)
Problem (c) What is the monthly sales volume (in dollars) at the break-even point? $________________
Problem (d) How many units must be sold each month to earn a monthly operating income of $40,000? _______________units
Problem (e) What is the monthly margin of safety (in dollars) if 1,500 units are sold each month? $_______________
Problem (f) What will be the monthly operating income if 1,500 units are sold each month?
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