Green Fingers Co. makes small plant stands that sell for $25 each. The company's annual level of production and sales is 120,000 plant stands. In additon to $430,500 of fixed manufacturing overhead and 159,050 of fixed administrative expenses, the following per unit cost have been determined for each plant stand :
$
Direct Materials 6.00
Direct Labour 3.00
Variable Manufacturing Overhead 0.80
Variable Selling Expenses 2.20
Total 12.00
a) Calculate the unit contribution margin and the contribution margin ratio for a plant stand.
b) Determine the breakeven point in number of plant stands and sales dollars.
c) Determine Greene Fingers'margin of safety ratio.
d) How many plant stands must the company sell to earn $996,450 net income?
e) How many palnt stands must be sold to break even if Greene Fingers' fixed manufacturing costs increase by $7,865? (Refer to original data)