Solution-What is reagan contribution margin and profit

What is reagan contribution margin and profit before tax

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Reference no: EM132611390

Reagan Inc. has developed a chew-proof dog bed 'The Tuff-Pup'. Fixed costs are $250 497 per year. The selling price for the Tuff-Pup is $42 per unit, and the variable cost is $29 per unit.

Requirements:

Question 1: Suppose that Reagan would like the break-even in units to be 15 500 and the company does not believe that the selling price or fixed cost can be changed. Calculate the new variable cost per unit. (Round to nearest cent)

Question 2: Suppose that Reagan produces and sells 35 000 Tuff-Pups this year. What is Reagan's contribution margin and profit before tax for this year? (Hint: use relevant information from the original context to answer this part).

Question 3: Using your calculations in requirement 'g', calculate the degree of operating leverage. (Round to three decimal places)

Reference no: EM132611390

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What is reagan contribution margin and profit before tax

Reference no: EM132611390

Reference no: EM132611390

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