2) A corporation sells 66,000 units of a product for $19.75 each, the variable cost per unit is $11.50 each. The fixed costs are $315,000.

 

Required:

 

A) breakeven units and dollars.

B) how many units must be sold to achieve a targeted income of $465,0007

C) What is the margin of safety in dollars and percentages?

D) What is the operating leverage?

E) The sales manager wants to raise prices by $2.00 each; demand will drop by ten percent, and the firm will spend an additional $95,000 on advertising. Will the firm increase income?

F) The manufacturing manager wants to automate a production line and reduce variable costs to $10.00 each. Fixed costs will increase by $75,000. Will the firm increase income?