XYZ Manufacturing Company has fixed costs $240,000, it sells its only product at $50 per unit

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XYZ Manufacturing Company has fixed costs $240,000, it sells its only product at $50 per unit. For every $1 generated by the sale of their product, they have $0.20 that contributes to fixed costs and profit.

Required:

1. Calculate the variable cost per unit.

2. Assume that the company plans to sell 20,000 units this year. In your opinion, would the    

    Company be better off with this plan? Support your answer with necessary calculations

3. How many units the company needs to sell to start making profit? Why? Prove your answer.

(12.5 marks)