Company produces one type of sunglasses with the following costs and revenues for the year: Total Revenues............................................................................................

Question:

Company produces one type of sunglasses with the following costs and revenues for the year:
Total Revenues............................................................................................ $5,000,000
Total Fixed Costs ........................................................................................ $1,000,000
Total Variable Costs .................................................................................... $3,000,000
Total Quantity Produced and Sold....................................................... 1,000,000 Units
a. What is the selling price per unit?
b. What is the variable cost per unit?
c. What is the per unit?
d. What is the break-even point in units?
e. Assume an income-tax rate of 40 percent. What quantity of units is required for PJ Company to make an after-tax operating profit of $1,200,000 for the year?

Contribution Margin
Contribution margin is an important element of cost volume profit analysis that managers carry out to assess the maximum number of units that are required to be at the breakeven point. Contribution margin is the profit before fixed cost and taxes...