ABC Co. sells one product: high quality jackets. ABC's contribution style income statement for the last fiscal year is below. Totals Per Unit Sales ur 500,000 $ 250.00 Variable Costs 300,000 150.00 72 Contribution Margin 200,000 Fixed Costs 140,000 0 Operating Income 60,000 1 Income Tax Expense (25%) 15,000 2 Net Income 45,000 3 4 Required: 15 a) What is ABC's break-even point in units? 16 b) What is ABC's Margin of Safety in dollars? 17 c) The new VP marketing has suggested a special promotion be run where units are sold at a discount of 8%. 18 The promotion is expected to increase the units sold by 20%, but variable costs would increase by $2 per unit due to special packaging. 19 The advertising associated with this campaign would cost $10,000. Should this promotion be run? Use incremental analysis. 20