Break-Even Units and Sales Revenue: Margin of Safety

Dupli-Pro Copy Shop provides photocopying service. Next year, Dupli-Pro estimates it will copy 2,990,000 pages at a price of $0.06 each in the coming year. Product costs include:

Direct materials	$0.009
Direct labor	$0.003
Variable overhead	$0.001
Total fixed overhead	$83,960

There is no variable selling expense; fixed selling and administrative expenses total $42,000.

Required:

In your computations that involve the contribution margin ratio, do not round the ratio.

1. Calculate the break-even point in units. fill in the blank 1 units

2. Calculate the break-even point in sales revenue. $fill in the blank 2

3. Calculate the margin of safety in units for the coming year. fill in the blank 3 units

4. Calculate the margin of safety in sales revenue for the coming year. $fill in the blank 4

5. What if the total selling and administrative expenses are reduced to $26,020? Recalculate the following:

a. Break-even point in units	fill in the blank 5	units
b. Break-even point in sales revenue	$fill in the blank 6
c. Margin of safety in units for the coming year	fill in the blank 7	units
d. Margin of safety in sales revenue for the coming year	$fill in the blank 8