The Peace Company has the following functional income statement for the prior month. 1 answer below »

The Peace Company has the following functional income statement for the prior month.

Sales ($50 * 100,000 units)

Cost of goods sold

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$5,000,000

Direct materials

$1,200,000

Direct labor

$950,000

Variable factory

$600,000

Fixed factory

$850,000

$3,600,000

Gross profit

$1,400,00

Selling and administrative expense

Variable

Fixed

Operating income

There were no beginning and ending inventories.

Required:

a. Calculate the contribution margin per unit.

b. Calculate the contribution margin ratio.

c. What is the break-even point in units?

d. What is the amount of sales in dollars needed to obtain a before-tax profit of $40,000?

 

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