Last year Company “E” sold 6,000 units of its only product for a price of $40 per unit. Total fixed costs/expenses per year were $120,000 and the contribution margin per unit was $30.

Required

a. How much was the Variable Cost/Expense Per Unit?

b. How much Income did Company “E” make last year? (ignore income taxes) 

c. Assuming this year’s sales price, fixed costs/expenses and contribution margin per unit are the same as last year, how many units will Company “E” have to sell to generate a desired profit of $72,000? (ignore income taxes)

Answer rating: 100% (QA)

a To calculate the variable costexpense per unit we subtract the contribution margin per unit fr... View the full answer