Break-Even and Margin of Safety Relationships

At a recent staff meeting, the management of Boost Technologies Inc. was considering discontinuing the Rocket Man line of electronic games from the product line. The chief financial analyst reported the following current monthly data for the Rocket Man:

Units of sales	420,000
Break-even units	472,500
Margin of safety in units	29,400

If 420,000 units are sold and sales at the break-even point are 472,500 units, there is

an adequateno

margin of safety.

2.Cordell, Inc. has an operating leverage of 3. Sales are expected to increase by 9% next year. What is the expected change in operating income next year fill in the blank 1 %

3.Sleep Tight, Inc. manufactures bedding sets. The budgeted production is for 52,000 comforters this year. Each comforter requires 1.5 hours to cut and sew the material. The cost of cutting and sewing labor is $12.50 per hour. Determine the direct labor budget for this year. $fill in the blank 1