Guilia wanted to look at financial risk from a breakeven and margin of safety point of view for the full operations. What is the breakeven point and margin of safety for TenAlpina? Assume the mix of $4,200$ pitons for every $350$ hammers will remain fairly

Table $1$

Volume

$50,400$

Revenue

$$529,200$

Materials

$$73,080$

Direct Labor

$$345,000$

Factory Overhead

Supplies

$$5,544$

Power

$$29,808$

Depreciation

$$14,355$

Occupancy

$$33,000$

Total Manufacturing costs

$$500,787$

Gross Margin

$$28,413$

$5\mathrm{.}4\%$

Exhibit $3$: Current and Estimated Cost and Revenue Data Current Results Average monthly piton demand Selling price per piton Annual worker labor cost $($fully$-$loaded, including benefits$)4,200$ units Annual machine and tool depreciation $($existing machines$)$ Annual occupancy cost $($including building lease$)$ Annual lighting$/$heating$/$utilities cost Direct material cost per piton Variable energy cost per piton Variable supplies cost per piton Annual administrative costs Estimated Information Increase in fixed utility costs due to new machine Material costs $($per hammer$)$ Utility costs per hammer Supply costs per hammer $$10\mathrm{.}50$ $ $57,500$ per worker $ $14,355$ $ $33,000$ $ $29,808$ $ $1\mathrm{.}45$ $ $0\mathrm{.}18$ $ $0\mathrm{.}11$ $ $7,200$ $$864$ $$10\mathrm{.}44$ $$0\mathrm{.}46$ $$0\mathrm{.}14$ BAB$278/$ MAY $2015$

Exhibit $2$: Depreciation Schedule, Including Estimate for Injection Molding Machine Subtotal Machine type Cold roll and cut Oven & drop$-$ forge Bore Deburr and polish Package Injection mold Total $($making just pitons$)$ Cost $$29,000$ $$88,000$ $$15,000$ $$9,000$ $$2,550$ $$143,550$ $$35,000$ $$178,550$ Life $1010101010-7$ $ $2,900$ $ $8,800$ $ $1,500$ $ $900$ $ $255$ $ $14,355$ $ $5,000$ $ $19,355$ Annual depreciation