Gaudy Inc. produces and sells a single product. The company has provided its contribution format income statement for May.

Sales Revenues (4,500 units)$427,500

Total Variable Costs$265,500

Total Contribution Margin$162,000

Total Fixed Costs$135,300

Operating Income $26,700

1) Determine the margin of safety in units.

2)Assume price increases by 10%, what is the new unit contribution margin?

3)Assume the company sells 4,300 units in June (disregard point b.). Prepare the contribution income statement for June assuming no other change.