Bangkok Ltd has provided the following production and sales information for each unit of Smartwatch. Direct materials Direct labour Variable factory overhead Selling price $ 44 68 30 360 Sales commissions 5% of the selling price The fixed costs for the period are $2 250 000. Required: (a) Calculate the break-even point. (b) Calculate the number of unit that must be sold to achieve a profit of $200 000. What is the margin of safety at this sales level? (c) Would it be better to sell 15 000 units at a selling price of $360 each or 20 000 units at a selling price of $330? (d) If an additional $30 000 is spent on fixed advertising costs, what level of dollar sales must be attained to earn a new profit of $ 250 000? Assume that there has been no change in the sales price. (e) Explain the 'margin of safety'. 1