Emerald, Inc, produces a single product. The results of the company's operations for a typical month are summarized in contribution format as follows:

	Sales...................................	$540,000
	Variable expenses..............	360,000
	Contribution margin...........	180,000
	Fixed expenses...................	120,000
	Net operating income.........	$ 60,000

The company produced and sold 120,000 kilograms of product during the month. There was no beginning or ending inventories.

Required:

Given the present situation, compute

The break-even sales in kilograms.

The break-even sales in dollars.

The sales in kilograms that would be required to produce net operating income of $90,000.

The margin of safety in dollars.

An important part of processing is performed by a machine that is currently being leased for $20,000 per month. The company has been offered an arrangement whereby it would pay $0.10 royalty per kilogram processed by the machine rather than the monthly lease.

Should the company choose the lease or the royalty plan?

Under the royalty plan compute break-even point in kilograms.

Under the royalty plan compute break-even point in dollars.

Under the royalty plan determine the sales in kilograms that would be required to produce net operating income of $90,000.