Jellybelly Ltd produces a single product. The projected income statement for the coming year is as follows:

Sales (35,000 units @ $20)	$ 700,000
Total Variable Costs	$(385,000)
Contribution Margin	$ 315,000
Total Fixed Costs	$(196,600)
Profit	$ 118,400

Required:

1. Compute the break-even point in units and sales dollars. (Note: round to the nearest dollar).

[4 marks]

2. Compute the new operating income if sales are 10 per cent higher than expected.

[4 marks]

3. If the variable cost became $12 per unit, what would the new break-even amount be in units? (Note: round to the nearest unit and dollar)

[4 marks]

4. Explain what is meant by a margin of safety and what would this margin be if Jellybelly Ltd sold 30,000 units per year? (Note: use your answer from Part c.)

[4 marks]

5. Explain the meaning of a relevant range and given an example (maximum of 200 words).