Steel contribution margin as percentage of dollar of sales

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Reference no: EM132126870

The Steel Shelf Company has the following operating costs:

Rent $3,000 per month

Utilities 1,100 per month

Insurance 1,500 per quarter

Property Taxes 6,000 per year

Steel $9.00 per shelf

Labor $1.00 per shelf

Sales Price $20.00 per shelf

1-What is the company’s variable cost per unit?

2-How many units per month does Steel Shelf Company need to sell to break even?

3-What is Steel’s contribution margin as a percentage of each dollar of sales?

4-If the company wants to earn a profit of $4,000 in a month, how many units do they need to sell?

5-If the price of steel increases by $1 for each shelf, insurance costs rise to $1,800 per quarter, and increased competition forces them to lower the sales price to $18.00 per shelf, how many units permonth will Steel now need to sell to break even?

Please answer all 5 questions.

Reference no: EM132126870

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