Gibson Modems, Incorporated makes modem cards that are used in notebook computers. The company completed the following transactions during year $1.$ All purchases and sales were made with cash.

Acquired $$830,000$ of cash from the owners.

Purchased $$310,000$ of manufacturing equipment. The equipment has a $$38,000$ salvage value and a four$-$year useful life.

The company started and completed $5,800$ modems. Direct materials purchased and used amounted to $$48$ per unit.

Direct labor costs amounted to $$33$ per unit.

The cost of manufacturing supplies used amounted to $$12$ per unit.

The company paid $$58,000$ to rent the manufacturing facility.

Gibson sold all $5,800$ units at a cash price of $$160$ per unit.

The sales staff was paid a $$10\mathrm{.}00$ per unit sales commission.

Paid $$47,000$ to purchase equipment for administrative offices. The equipment was expected to have a $$3,800$ salvage value and a three$-$year useful life.

Administrative expenses consisting of office rental and salaries amounted to $$96,720.$

Required

Use the following partially completed form to prepare an income statement using the contribution margin format.

Determine the break$-$even point in units and in dollars.

Assume that next year$$s sales are budgeted to be the same as the current year$$s sales. Determine the margin of safety expressed as a percentage.