Questions:
1. MCU Phone Company sells its cordless phone for $300 per unit. Fixed costs total $540,000, and variable costs are $120 per unit. Determine the (1) contribution margin per unit and (2) break-even point in units.
2. Assume that MCU Phone Co. is subject to a 30% income tax rate. Compute the units of product that must be sold to earn after-tax income of $504,000.