Reference no: EM133216238

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

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

Contribution Margins for each product line

Break-even quantities for each product line

Break-even quantities to earn $500,000 per year margin on the high-end line (at the current sales price)

Break-even quantities to earn $300,000 per year margin on the economical line (at the current sales price)