Break-Even Units, Contribution Margin Ratio, Margin of Safety

Khumbu Company's projected profit for the coming year is as follows:

	Total			Per Unit
Sales	$2,241,000			$27.00
Total variable cost	717,120			8.64
Contribution margin	$ 1,523,880			$ 18.36
Total fixed cost	702,778
Operating income	$ 821,102

Required:

1. Compute the break-even point in units. If required, round your answer to nearest whole value. units

2. How many units must be sold to earn a profit of $240,000? If required, round your answer to nearest whole value. units

3. Compute the contribution margin ratio. If required, round your answer to nearest whole number. %

Using the rounded ratio from above, compute the additional profit that Khumbu would earn if sales were $160,000 more than expected. $

4. For the projected level of sales, compute the margin of safety in units. units