Mallory Motors sells small electric motors for \(\$ 2\) each. Variable costs are \(\$ 1.20\) per unit, and fixed costs total \(\$ 60000\) per year.

Required:

a Write out Mallory's profit equation in terms of motors sold.

b Draw a graph of Mallory's total contribution margin and total fixed cost as volume varies. Locate the break-even point on this graph.

c Calculate Mallory's break-even point in units.

d What total profit would Mallory expect if it sold 500000 motors?

e How many motors would Mallory have to sell to earn \(\$ 40000\) profit?