Ponsford's Cellular sells phones for $100.The unit variable cost per phone is $50 plus a selling commission of 10%.Fixed manufacturing costs total $1250 per month,while fixed selling and administrative costs total $2500.
Required:
a.What is the contribution margin per phone?
b.What is the break-even point in phones?
c.How many phones must be sold to earn pre-tax profit of $7500?
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Question

Quizplus · Accepted Answer

The Answer of Ponsford's Cellular sells phones for $100.The unit variable cost per phone is $50 plus a selling commission of 10%.Fixed manufacturing costs total $1250 per month,while fixed selling and administrative costs total $2500.
Required:
a.What is the contribution margin per phone?
b.What is the break-even point in phones?
c.How many phones must be sold to earn pre-tax profit of $7500?
_____________________________________________________________________________________________
_____________________________________________________________________________________________

Ponsford's Cellular Sells Phones for $100