Information concerning a product produced by Hinshaw Company appears here. Sales price per unit .................. $159 Variable

Question:

Information concerning a product produced by Hinshaw Company appears here.

Sales price per unit .................. $159

Variable cost per unit ................. $34

Total annual fixed manufacturing and operating costs .. $912,500

Required

Determine the following.

a. Contribution margin per unit.

b. Number of units that Hinshaw must sell to break even.

c. Sales level in units that Hinshaw must reach to earn a profit of $325,000.

d. Determine the margin of safety in units, sales dollars, and as a percentage.

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...