Bain corporation makes and sells state-of-the-art electronics products. one of its segments produces the math machine, an inexpensive calculator. the company’s chief accountant recently prepared the following income statement showing annual revenues and expenses associated with the segment’s operating activities. the relevant range for the production and sale of the calculators is between 30,000 and 60,000 units per year.

revenue (40,000 units × $10.80) $ 432,000
unit-level variable costs
materials cost (40,000 × $2.70) (108,000 )
labor cost (40,000 × $1.20) (48,000 )
manufacturing overhead (40,000 × $1.20) (48,000 )
shipping and handling (40,000 × $0.30) (12,000 )
sales commissions (40,000 × $1.20) (48,000 )
contribution margin 168,000
fixed expenses
advertising costs (24,000 )
salary of production supervisor (72,000 )
allocated company wide facility-level expenses (96,000 )
net loss $ (24,000 )