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Problem set Ross Pros Sports Equipment began business in 2019, and its sales in 2019 were 4,800 units of sports equipment. The selling price per unit was $300. Variable cost per unit of sports equipment was $186. Annual fixed costs were $446,400.

1. Please use the format of a contribution margin income statement to calculate the contribution margin (in dollars), unit contribution, and contribution margin ratio for Ross Pros Sports Equipment.

Part 1
	Total	Per unit	Percentage
Sales (4,800 units)		300
Less: Variable costs		186
Contribution margin
Less: Fixed costs
Net income

2. What will be the break-even point in units and in dollars if we assume that Ross Pros Sports Equipment sells one type of sports equipment only?

Part 2
Break-even in units
Break-even in sales

3. How many units must the company sell to earn a pre-tax income of $500,028?

Part 3
Target before-tax income	500,028
Target income volume (units)

4. If the companys tax rate is 28 percent, how many units of sports equipment must be sold to earn an after-tax profit of $700,200?

Part 4
Target after-tax income	700,200
Target income volume (units)

5. What is the companys margin of safety based on the sales of 4,800 units of sports equipment?

Part 5
Margin of safety

6. Assume that there is no change in fixed costs. What will be the expected net income if this company has the sales revenue of $2,010,000?

Part 6		Units
Sales	2,010,000
Less: Variable costs
Contribution margin
Less: Fixed costs
Net income

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