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Variable cost per unit = $10 Contribution margin per unit = Selling price Variable cost per unit = $30 $10 = $20 Fixed Costs: Managers salary ($60,000 1.18 0.4) 12 $2,360 per month 3-48 EA Rent Hourly employee wages (3 160 hours $12) Total fixed costs 900 per month 5,760 per month $9,020 per month Breakeven point = Fixed costs Contribution margin per unit = $9,020 $20 = 451 hats (per month) Fixed costs + Target operating income Contribution margin per unit 2

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