Problem: Nelson Company manufactures running shoes. The selling price per pair of shoes (one unit) averages $80 and variable costs per pair are $47.50. The sales volume of $776,000 produces $100,750 of net income before taxes.
Required to do:
a. Compute total variable costs.
b. Compute total fixed costs
c. Compute the break-even point in units.
d. Compute the quantity of units above breakeven to reach targeted net income before taxes.
e. Compute the contribution margin and contribution percentage