provided you with the following costs and relevant information that are assumed for year 20XY

Task# 3: Cost Classification: The Lee’s have provided you with the following costs and relevant information that are assumed for year 20XY. Classify the costs as variable costs or fixed costs.

Advertising Fees = $4,000

Labor = $400/month

One part-time employee will be hired to take care of packaging and shipping. This employee will be paid $10 per hour. He or she is estimated to work 40 hours total per month.

Packaging Supplies = $3,000

Office Supplies = $800

Phone and Internet Service = $115/month

Product Supplies = $9,000

Shipping Fees = $1,000/month

Conference Exhibitor Fee = $3,000

Travel Expenses for Conference (e.g. airfare, meals, taxi) = $1,200

Utilities for the Home Workshop = $105/month

Break-Even Analysis: calculate how many units need to be sold to break even, based on the costs provided in task #3. Assume that only one conference will be attended and the estimated expenses associated with this conference are on target. Also assume that the value for total units per year is based on sales of 70 units per month. Therefore, total units sold per year are 840. The selling price per unit is $79.

Contribution Margin: Based on the Break-Even Analysis just performed, what is the contribution margin per unit?

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