Senora Company manufactures a single product that sells for $110 per unit. The company projects sales of

Question:

Senora Company manufactures a single product that sells for $110 per unit. The company projects sales of 500 units per month. Projected costs are as follows:

1. Prepare a contribution margin income statement for the month.
2. What is the contribution margin ratio?
3. What volume, in terms of units, must the company sell to breakeven?

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...