Break Even point question. Income statement of manufacturing operations Units $ Sales 360,000 7,500,000 Variable cost 3,500,000 Contribution Margin 4,000,000 Fixed Expenses 2,500,000 Net profit 1,500,000 Calculate the Sales price, Contribution margin and Variable Expenses (all per unit). Calculate the company's contribution margin ratio. Calculate the company's BEP in units & dollars. Calculate the margin of safety for this company. Budgeted Sales - $8,500,000. Assume that management wants a $2,000,000 profit next year. How many production units must be sold to reach this goal? What is the operating leverage in dollars and %? If Sales increase by 5% how much will net income increase? The company president has an idea to improve operations and sales. He believes that increasing marketing expense by $100,000 and offering an extra 2 dollars sales commission will increase number of units by 10,000. What should the company do? Next year due to increased competition selling prices will drop 5%. Management wants to maintain the same net profit as this year ($1.5 Mill). Assuming all other costs are the same, How many units must be sold to reach this goal? Due to expansion of the factory underway capital investments have resulted in fixed costs of additional $150,000 next year. What is the Net profit, BEP and MOS likely from current operations?