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Flash Co. manufactures 1GB flash drives. Price and cost data for the company are as follows:
Sales price per unit $20.00
Variable Costs per unit:
Direct materials 6.40
Direct labor 5.00
Overhead 2.00
Operating costs 1.40
Monthly Fixed Costs:
Overhead $191,400
Operating Costs 276,600
What is the company’s contribution margin per unit?

What is the company’s contribution margin ratio?

What would be the company’s monthly operating income if the company sold 150,000 units?

What is the breakeven point is UNITS AND SALES DOLLARS?

To earn a monthly profit of $260,000, how many units would be have to be sold?

To earn a monthly profit of $260,000, what must sales dollars amount to?

Using the information calculated in questions 4, 5, and 6, calculate the margin of safety in DOLLARS AND UNITS as well as the PERCENTAGE OF SALES.

Using the information in question (3), compute the operating leverage factor.

If the sales volume increases by 8%, by what percentage will the operating income increase?

Management is currently in contract negotiations with the labor union. If the negotiations are accepted, direct labor costs will increase by 10% and fixed costs will increase by $22,500 per month. What will the new breakeven point be in SALES UNITS AND SALES DOLLARS?

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