Ciganda Company produces and sells strings of colorful indoor$/$outdoor lights for holiday display to retailers for $$8\mathrm{.}10$ per string. The variable costs per string are as follows:

Line Item Description Cost

Direct materials $$2\mathrm{.}90$

Direct labor $1\mathrm{.}70$

Variable factory overhead $0\mathrm{.}48$

Variable selling expense $0\mathrm{.}42$

Fixed manufacturing cost totals $$245,650$ per year. Administrative cost $($all fixed$)$ totals $$237,950.$ The company expects to sell $225,000$ strings of lights next year.

Required:

$1.$ Calculate the break$-$even point in units.

fill in the blank $1$ of $1$

units

$2.$ Calculate the margin of safety in units.

fill in the blank $1$ of $1$

units

$3.$ Calculate the margin of safety in dollars.

fill in the blank $1$ of $1$$

$4.$ Conceptual Connection: Suppose Ciganda actually experiences a price decrease next year, while all other costs and the number of units sold remain the same. Would this increase or decrease risk for the company? $($Hint: Consider what would happen to the number of break$-$even units and to the margin of safety.$)$

Increase