AD Company estimates that variable costs will be 70% of sales and fixed costs will total $1,800,000. The selling price of the product is $10, and 700,000 units will be sold.

Instructions: Using the mathematical equation

(a) Compute the break-even point in units and dollars. (2 marks)

(b) Compute the margin of safety in dollars and as a ratio. (2 marks)

(c) Compute net income. (2 marks)