Question: explain how to compute the answer to the following problem: Phan Incorporated has annual fixed costs totaling $6,000,000 and variable costs of $350 per unit.

explain how to compute the answer to the following problem:

Phan Incorporated has annual fixed costs totaling $6,000,000 and variable costs of $350 per unit. Each unit of product is sold for $500.

Required:

a. Calculate the contribution margin per unit.

b. Find the break-even point in units.

c. How many units must be sold to earn an annual profit of $750,000?

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