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Break Even

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The following information relates to the three bullets bellow.

Company A sells several products for an average price of $20 per unit and the average flexible costs per unit are as follows:

Direct material $4.00
Direct labor $1.60
Indirect manufacturing costs $0.40
Selling commissions $2.00

Company A's annual capacity-related costs total $96,000.

1. The contribution margin per unit is:

2. The number of units that Company A must sell each year to break even is:

3. The number of units that Company A must sell annually to make a profit of $144,000 is:

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The break even average price is determined.

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