1. The manufacturer of a circuit board used in fax machines has a variable cost of $3.08 per unit and fixed costs of $285,000. What price does the manufacturer need to charge to earn a 25% markup on selling price?
2. Capacity at Crater Research is 10,000 units. In order to breakeven the company must operate at a 74% capacity. If fixed costs are $300,000, what must the contribution per unit be?
3. a) YYZ Logic earns a contribution margin of 38% on sales of its popular learning aids. If the company is considering lowering the price of this product by 8.5%, what increases in dollar sales will be necessary to match last year's total contribution of $4.8 million? How much were total sales last year?
b) What increase in unit sales will YYZ Logic need to achieve the same level of contribution?