Digital Cellular sells phones for $100.The unit variable cost per phone is $50 plus a selling commission of 10%.Fixed manufacturing costs total $1,250 per month,while fixed selling and administrative costs total $2,500.
Required:
a.What is the contribution margin per phone?
b.What is the breakeven point in phones?
c.How many phones must be sold to earn pretax income of $7,500?

Question

Quizplus · Accepted Answer

The Answer of Digital Cellular sells phones for $100.The unit variable cost per phone is $50 plus a selling commission of 10%.Fixed manufacturing costs total $1,250 per month,while fixed selling and administrative costs total $2,500.
Required:
a.What is the contribution margin per phone?
b.What is the breakeven point in phones?
c.How many phones must be sold to earn pretax income of $7,500?

Digital Cellular Sells Phones for $100