The Steel Shelf Company has the following operating costs:
Rent $3,000 per month
Utilities 1,100 per month
Insurance 1,500 per quarter
Property Taxes 6,000 per year
Steel $9.00 per shelf
Labor $1.00 per shelf
Sales Price $20.00 per shelf
1-What is the company’s variable cost per unit?
2-How many units per month does Steel Shelf Company need to sell to break even?
3-What is Steel’s contribution margin as a percentage of each dollar of sales?
4-If the company wants to earn a profit of $4,000 in a month, how many units do they need to sell?
5-If the price of steel increases by $1 for each shelf, insurance costs rise to $1,800 per quarter, and increased competition forces them to lower the sales price to $18.00 per shelf, how many units permonth will Steel now need to sell to break even?
Please answer all 5 questions.