Bohica Confidential Company, a sporting goods manufacturer, sells binoculars for $ 140 per unit. The variable cost is $ 100 per unit, while the fixed costs are $ 1,200,000.

a. Compute the anticipated break-even sales [units] for binoculars.

b. Compute the sales [units] for binoculars required to realize target operating income of $400,000.

c. Construct a cost-volume-profit chart for the anticipated break-even sales for binoculars

Cigars for Enthusiasts Inc., a start-up company, founded by Cuauhtemoc Meza and Lars Knutson following their respective tours with the United States Army, is off to a great start. Both gentlemen enjoy the premium products themselves and expect their initial first year as an online distributor of premium cigars and accessories to bust records for start-ups. Cigars for Enthusiasts expects to maintain the same inventories at the end of the year as at the beginning of the year. The estimated fixed costs for the year are $ 288,000 and the estimated variable costs per unit are $ 14. It is expected that 60,000 units will be sold at a price of $ 20 per unit. Maximum sales within the relevant range are 70,000 units.

a. What is (a) the contribution margin ratio and (b) the unit contribution margin?

b. Determine the break-even point in units.

c. Construct a cost-volume-profit chart, indicating the break-even point.

d. Construct a profit-volume chart, indicating the break-even point.

e. What is the margin of safety?