Anton Company produces and sells bicycles for $500.The variable costs per unit are $300 plus a sales commission of 15% of the selling price.Total fixed costs consist of $16,000 in fixed overhead and $9,000 in fixed selling and administrative costs.
Required:
1)Compute the contribution margin per unit.
2)Compute the break-even point in units and dollars.
3)How many units must be sold to earn a profit of $20,000?
4)What would be the break-even point in units if the sales commission is reduced to $20 per unit sold?

Question

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The Answer of Anton Company produces and sells bicycles for $500.The variable costs per unit are $300 plus a sales commission of 15% of the selling price.Total fixed costs consist of $16,000 in fixed overhead and $9,000 in fixed selling and administrative costs.
Required:
1)Compute the contribution margin per unit.
2)Compute the break-even point in units and dollars.
3)How many units must be sold to earn a profit of $20,000?
4)What would be the break-even point in units if the sales commission is reduced to $20 per unit sold?

Anton Company Produces and Sells Bicycles for $500