Ahlia Co. has a unit selling price of $6.5, variable cost per unit $4.5, and fixed costs of $10,000.

Instructions:

1. What is the breakeven revenue? (2 marks)
2. If budgeted sales are 8,500 units, what is the margin of safety in units? What is the margin of safety as a %? What does this mean? (4 marks)
3. What is the sales volume (in units) required to make a profit of $20,000? (2 marks)