Big Red Toy Trucks makes a Fire Engine Their research shows a price of $30.00, with variable costs were $22.00 per unit. Fixed costs will be $20,000. Required:

1. Calculate the contribution margin per unit:

2. Calculate the breakeven point in units:

3. If expected sales are 3,000 units what is the Margin of Safety in units?

Next year the company plans to increase fixed costs by spending additional funds of $4,000 for a total of $24000. They also will hanve a decrease in the variable cost from $22 to$18 due to the efficiencies gained by the additional fixed costs

Calculate the new breakeven point in after the increase in fixed and decrease in variable costs.

Calculate the new Margin of safety

Evaluate the decision: