Penny Company offers two products. At present, the following represents the usual results of a month's operations:

Required:
a. Find the break­even point in dollars.
b. Find the margin of safety in dollars.
c. The company is considering decreasing product K's unit sales to 80,000 and increasing product L's unit sales to 180,000, leaving unchanged the selling price per unit, variable cost per unit, and total fixed costs. Would you advise adopting this plan?
d. Refer to (c) above. Under the new plan, find the break­even point in dollars.
e. Under the new plan in (c) above, find the margin of safety in dollars.

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Product K Product L Per Unit Per Unit Sales revenue s 120,000 1.20 s 80,000 0.80 200,000 Variable expenses 60,000 0.60 60,000 0.60 120,000 SI 60,000 s0.60 20,000 s0.20 SI 80,000 margin Fixed expenses 50,000 Net operating income 30,000