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:
Emerald Island Company is considering building a manufacturing plant in

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.

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...