Polk Company developed the following information for itsproduct: Per unit
Sales price $90
Variable cost 63
Contribution margin $27
Total fixed costs $1,080,000 Instructions
Answer the following independent questions and show computationsusing the contribution margin technique to support youranswers.
1. How many units must be sold to break even?
2. What is the total sales that must be generated for the companyto earn a profit of $60,000?
3. If the company is presently selling 45,000 units, but plans tospend an additional $108,000 on an advertising program, how manyadditional units must the company sell to earn the same net incomeit is now making?
4. Using the original data in the problem, compute a new break-evenpoint in units if the unit sales price is increased 20%, unitvariable cost is increased by 10%, and total fixed costs areincreased by $210,000. . . .
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