1. Assume Sparkle Co. expects to sell 150 units next month. The unit sales price is $100, unit variable cost is $30, and the fixed costs per month are $5,000. Themargin of safety in terms of sales revenue is:

2. Tim Taylor has written a self improvement book that has the following cost characteristics:

Selling Price $16.00 per book

Variable cost per unit:

Production $4.00

Selling & administrative 2.00

Fixed costs:

Production $88,400 per year

Selling & administrative 26,100per year

How many units must be sold to break-even?

3. Winny's Office Furniture has a contribution margin ratio of 16%. If fixed costs are $179,300, how many dollars of revenue must the company generate in order to reach the break-even point?

4. Thomas Train has collected the following information over the last six months.

Month Units produced Total costs

March 10,000 $25,600

April 12,000 26,200

May 19,000 29,200

June 13,000 26,450

July 12,000 26,000

August 15,000 26,500

Using the high-low method, what is the variable cost per unit?