Will you please show the formula that you use to solve I am

Will you please show the formula that you use to solve? I am confused on which numbers to plug in and why.

ABC Corp. is introducing a new product. The product is forecast to have $30 million per year in total fixed costs, COGS per unit is $35, and salespeople earn 5% commission on sales.

1. At a selling price of $100, how many units need to be sold annually to breakeven?

2. At the price of $100, how many units need to be sold to generate a net margin of $300,000 per year?

3. At the selling price of $100, how many units need to be sold annually to generate a 12% net margin?

4. Suppose that the annual level of total industry sales for the next year is forecast to be 2,500,000 units. If ABC is to earn a 10% net margin, what market share would they have to secure?

Solution

1. Fixed cost = 30 million $

Variable cost = 35$ + 100*.05 = 40$

Selling Price = 100 $

Breakeven = FC/(SP-VC)

= 30 million / 60 = 500000 units

2. For net margin of 300,000 = Breakeven + 300,000/(SP-VC)

= 500000 + 5000 = 505000 units

3. Breakeven sales = 500000 units

Sales = 500000*100 = 50000000 $

Net margin required = .12*50000000 = 6000000 $

After the breakeven each unit will have contribution margin of = 60 $ on 100 $ sales

Deducting 12% margin = 60- .12*100 = 48 $

Sales volume = 6000000/48 = 125000 units

Total sales required = Breakeven + 125000 = 625000

4. Breakeven sales = 500000 units

Sales = 500000*100 = 50000000 $

Net margin required = .10*50000000 = 5000000 $

After the breakeven each unit will have contribution margin of = 60 $ on 100 $ sales

Deducting 10% margin = 60- .10*100 = 50 $

Sales volume = 6000000/50 = 120000 units

Total sales required = Breakeven + 120000 = 620000

Market share = 620000/2500000 = 24.8%