Davies shows the following information for the next year for its single product, ceramic pots.

Selling price: $15 per unit

Variable cost: $12 per unit

Fixed cost = $42,000

Requirement 1: Compute the break-even point in units and sale dollars. Show your computations (6 points)

Requirement 2: What amount of sales revenue would Davies need to realize next year in order to generate a net income of $60,000 after tax (assume a tax rate of 20%). Show your computations (10 points)

Requirement 3: Using the sales revenue computed in #2, compute the margin of safety in sales dollars. (4 points)