The Holiday Card Company, a producer of speciality cards, has asked you to complete several calculations based upon the followin information:
Income Tax rate: 40%
Selling price per unit: $7.90
Varibale cost per unit: $5.78
Total Fixed Cost: $84,800.00
Required:
a) What is the unit contribution margin?
b) What is the contribution margin ratio?
c) what is the break even point in cards?
d) If your sales doubled,
-What would be the effect on total fixed costs? Total variable costs?
- What would be the degree of operating leverage?
e) What sales volume is needed to earn an after-tax nest income of $13,028.40? how may cards must be sold?