Henning Co. estimates that variable costs will be 70% of sales and fixed costs will total $2,160,000. The selling price of the product is $10, and 750,000 units will be sold.

Instructions:

Using the mathematical equation,

(a) Compute the break-even point in units and dollars.

(b) Compute the margin of safety in dollars and as a ratio.

(c) Compute net income.

Duration for solving (a), (b) and (c): (1015 min.)