Break-Even in Units and Sales Dollars, Margin of Safety

Aubrey Company produces a single product. Last year's income statement is as follows:

Sales (12,000 units)	$1,218,000
Less: Variable costs	365,400
Contribution margin	$852,600
Less: Fixed costs	300,000
Operating income	$552,600

Required:

1. Compute the break-even point in units and sales revenue. In your computations, round the unit contribution margin and the contribution margin ratio to four decimal places. Round your final answers to the nearest whole unit or dollar.

2. What was the margin of safety in dollars for the Company last year? Round your final answer to the nearest whole dollar. 3. Suppose that Aubrey Company is considering an investment in new technology that will increase fixed costs by $60,000 per year, but will lower variable costs to 28 percent of sales. Units sold will remain unchanged. Prepare a budgeted income statement assuming the company makes this investment.

What is the new break-even point in units, assuming the investment is made? In your computations, round the unit contribution margin to three decimal places. Round your final answer to the nearest whole unit. fill in the blank c921b5074061048_1 units