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Allison Enterprises sells a product for $100 per unit. The variable cost is $60 per unit, while fixed costs are $180,000. Add
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Answer #1

A) Contribution margin per unit = Selling price - Variable costs

= 100-60

= 40

.

B) Breakeven point in units = Fixed cost/Contribution margin per unit

= 180,000/40

= 4,500 units

.

C) Breakeven point in dollars = 4,500 * 100

= 450,000

.

D) Target income = 60,000/(100-40)% = 100,000

Units needed = (Fixed costs + target income) /Contribution margin per unit

= (180,000+100,000)/40

= 7,000 units

.

E) Breakeven units = 180,000/(120-60)

= 3,000 units

.

F) After tax income = (6,000*40) - 180,000 - 40%

= 36,000

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