1. KZ Manufacturing has the following data:

Selling Price	$	70
Variable manufacturing cost	$	32
Fixed manufacturing cost	$	280,000	per month
Variable selling & administrative costs	$	10
Fixed selling & administrative costs	$	129,000	per month

If the company has actual monthly sales of $1,590,000 and desires an operating profit of $59,000 per month, what is the margin of safety in sales dollars?

2. ABC Co. manufactures two products, AB and BC. The following are projections for the coming year:

	AB						BC
	14,000 units						7,000 units
Sales				$	14,000					$	14,000
Costs:
Fixed	$	2,600					$	4,900
Variable		8,400			11,000			5,600			10,500
Income before taxes				$	3,000					$	3,500

How many AB units will be sold at the break-even point, assuming that the facilities are jointly used with the sales mix remaining constant?

Multiple Choice

• 11,250

• 7,500

• 10,000

• 6,500