The following is information concerning a product manufactured by Ames Brothers:

Question

The following is information concerning a product manufactured by Ames Brothers: Sales price per unit $ 68 Variable cost per unit 43 Total fixed manufacturing and operating costs (per month) 430,000 a. Determine the unit contribution margin. (Omit the "$" sign in your response.) Unit contribution margin $ b. Determine the number of units that must be sold each month to break even. (Round your answer to the nearest whole number.) Number of units units c. Determine the unit sales level that must be reached to earn an operating income of $270,000 per month. (Round your answer to the nearest whole number.) Unit sales level units

Explanation / Answer

a. unit contribution margin = 68-43 =$25 b. break even point =430,000/(25) =17200 units c. unit sales level that must be reached to earn an operating income of $270,000 =( 430,000+ 270,000)/(25) =28000 units

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