Question
Break-Even Units and Sales Revenue: Margin of Safety Dupli-Pro Copy Shop provides photocopying service. Next year, Dupli-Pro estimates it will copy 3,190,000 pages at
Break-Even Units and Sales Revenue: Margin of Safety Dupli-Pro Copy Shop provides photocopying service. Next year, Dupli-Pro estimates it will copy 3,190,000 pages at a price of $0.08 each in the coming year. Product costs include: Direct materials Direct labor Variable overhead Total fixed overhead $0.012 $0.004 $0.002 $135,700 There is no variable selling expense; fixed selling and administrative expenses total $41,000. Required: In your computations that involve the contribution margin ratio, do not round the ratio. 1. Calculate the break-even point in units. units 2. Calculate the break-even point in sales revenue. $ 3. Calculate the margin of safety in units for the coming year. units 4. Calculate the margin of safety in sales revenue for the coming year. $ 5. What if the total selling and administrative expenses are reduced to $21,780? Recalculate the following: a. Break-even point in units b. Break-even point in sales revenue c. Margin of safety in units for the coming year units units
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