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Question - Cellular Montana Alta is a business managed by Maneco and Viroldo. The average sales price of cell phones is $ 765.00. The average variable cost per unit is $ 255. For each unit sold, sellers are paid 10% commissions of the sales price. Total store fixed costs are $ 37,250 per month.
Required -
a. What is the contribution margin for cell phones in dollars and in percentages?
b. What is the tie point per month in units; in units?
c. How many units do you have to sell in the month if you want an income before contributions of $ 27,500?
d. Consider a tax rate of 35%. If you want a Net Income of $ 40,000. How many units and dollars of income do you need to sell?
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