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What sales dollar level is required

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Question - Treck Ltd manufactures and sells high ending bikes. Among its product range, the Superfry Model sells for $5,200 per unit. The production line has an annual fixed cost of $9,840,000. The business current requires a contribution margin of 35%.

Required -

(a) Calculate the variable cost per unit, the breakeven point in selling unit and sales dollars.

(b) If the company wants to earn a before-tax profit of $1,000,000, how many units must be sold? What sales dollar level is required? What is the company's margin of safety at this sales level?

(c) If the company wants to earn a before-tax profit of 15% of sales, how many units must be sold? What are the sales dollars?

Reference no: EM132566762

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