Homework Answers
contribution margin=Sales-Variable cost
=(1200-750)=$450 per drone
a.Breakeven point=Fixed cost/contribution margin
=(900,000/450)=2,000 units
b.Target profit before tax=$135,000/(1-tax rate)
=135,000/(1-0.4)=$225,000
Target contribution margin=Fixed cost+Target profit before tax
=(900,000+225,000)=$1,125,000
Hence required sales=1,125,000/450
=2500 units
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