Emerald Island Company is considering building a manufacturing plant in
Emerald Island Company is considering building a manufacturing plant in County Kerry. Predicting sales of 100,000 units, Emerald Isle estimates the following expenses:
An Irish firm that specializes in marketing will be engaged to sell the manufactured product and will receive a commission of 10% of the sales price. None of the U.S. home office expense will be allocated to the Irish facility.
Required:
1. If the unit sales price is $2, how many units must be sold to break even?
2. Calculate the margin of safety ratio.
3. Calculate the contribution margin ratio.
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