Ciganda Company produces and sells strings of colorful indoor/outdoor lights for holiday display to retailers for $8.10 per string. The variable costs per string are as follows:

Direct materials .................................$2.90
Direct labor ..........................................1.70
Variable factory overhead................. 0.48
Variable selling expense ....................0.42

Fixed manufacturing cost totals $245,650 per year. Administrative cost (all fixed) totals $237,950. The company expects to sell 225,000 strings of lights next year.

Required:
1. Calculate the break-even point in units.
2. Calculate the margin of safety in units.
3. Calculate the margin of safety in dollars.

4. Suppose Ciganda actually experiences a price decrease next year, while all other costs and the number of units sold remain the same. Would this increase or decrease risk for the company?