Note: problem 1-5 are all related and you will continue to use the same information from the previous problems.

Problem #1 (20 Points) ABC Company produces one product. The sales price per unit is $65 and the Variable cost per unit is $44.

Calculate the following: Contribution Margin Contribution Margin Ratio

Problem #2 (20 Points) ABC Company has monthly fixed costs of $150,000.

Calculate the following: Break-Even in Units Break-Even in Dollars

Problem #3 (20 Points) ABC Company would like to earn an after tax profit of $55,000 for the month. They are in a 30% tax bracket.

Calculate the following: Target Pre-Tax in Units Target Pre-Tax Target in Dollars

Problem #4 (20 Points) ABC Company has $541,000 in expected sales for next month.

Calculate the following: Margin of Safety

Problem #5 (20 Points) ABC Company is considering purchasing a new machine that will automate several of their manufacturing operations. The new machine will increase fixed costs by $20,000 per month, and decrease the per unit variable cost by $4. Using cost analysis, should ABC Company invest in this new machine?