The peace company has the following functional traditional

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Reference no: EM13390062

The Peace Company has the following functional (traditional) income statement for the prior month.

Sales	($50 * 100,000 units)		$5,000,000
Cost of goods sold
	Direct materials	$1,200,000
	Direct labor	$950,000
	Variable factory overhead	$600,000
	Fixed factory overhead	$850,000	$3,600,000
Gross profit			$1,400,000
Selling and administrative expense
	Variable	$250,000
	Fixed	$120,000	$370,000
Operating income			$1,030,000
There were no beginning and ending inventories.

Required:

Calculate the contribution margin per unit.
Calculate the contribution margin ratio.
What is the break-even point in units?
What is the amount of sales in dollars needed to obtain a before-tax profit of $40,000?

Reference no: EM13390062

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