Territory Ltd sells a single product, an electric drill. The drill sells for $$160$ per unit.

Annual fixed costs are $$618,000,$ and the contribution margin rate is $40\%.$

Required:

a$)$ What are the variable costs per unit?

b$)$ How many units must the company sell to break even?

c$)$ What is the break$-$even point in sales dollars?

d$)$ If the company wants to earn a before$-$tax profit of $115,000,$ how many units must be

sold? What sales dollar level is required? What is the company$$s safety margin at this

sales level?

e$)$ If the company wants to earn a before$-$tax profit of $20\%$ of sales, how many units must

be sold?

Answer rating: 100% (QA)

a To calculate the variable costs per unit we need to subtract the contribution margin from the selling price per unit Contribution margin Selling price per unit Variable costs per unit Given that the ... View the full answer