1) What is Serendipity Sound's break-even point in units?

2) What is Serendipity Sound's break-even point in sales dollars?

3) How many units would Serendipity Sound have to sell in order to earn $260,000?

4) What is the firm's margin of safety?

5) Management estimates that direct-labor costs will increase by 8 percent next year. How many units will the company have to sell next year to reach its break-even point?

6) If the companys direct-labor costs do increase by 8 percent, what selling price per unit of product must it charge to maintain the same contribution-margin ratio?

[The following information applies to the questions displayed below.] Serendipity Sound, Inc. manufactures and sells compact discs. Price and cost data are as follows: $ 25.00 Selling price per unit (package of two CDs) Variable costs per unit: Direct material Direct labor Manufacturing overhead Selling expenses $ 10.50 5.00 3.00 1.30 Total variable costs per unit $ 19.80 Annual fixed costs: Manufacturing overhead Selling and administrative 192,000 276,000 $ 468,000 Total fixed costs Forecasted annual sales volume (120,000 units) $3,000,000 In the following requirements, ignore income taxes