Stan Todd,Inc.wants to manufacture a new cell phone that can be worn on the wrist.Information from doing market research shows that he can sell this phone for $25 each.His fixed costs would be $145,000 a year and variable costs would amount to $10 per phone.
(1)What would the contribution margin ratio be?
(2)What sales volume in units would Stan need to break-even?
(3)What sales volume in units would Stan need to earn $200,000 profit?
(4)What would be the margin of safety if he sold 25,000 units (use the information calculated in #2)?

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The Answer of Stan Todd,Inc.wants to manufacture a new cell phone that can be worn on the wrist.Information from doing market research shows that he can sell this phone for $25 each.His fixed costs would be $145,000 a year and variable costs would amount to $10 per phone.
(1)What would the contribution margin ratio be?
(2)What sales volume in units would Stan need to break-even?
(3)What sales volume in units would Stan need to earn $200,000 profit?
(4)What would be the margin of safety if he sold 25,000 units (use the information calculated in #2)?