Magpie Inc. sells a single product for $40 per unit. Variable production costs are $12 per unit. Fixed overhead costs amount $54,000 per month. Variable selling costs are $8 per unit. Fixed selling costs are $6,000 per month. Last month, the company produced 10,000 units and sold 8,000 units.

1. What is the company's breakeven point in units (rounded)?

• A.

4,000

• B.

3,000

• C.

8,000

• D.

3,333

How many units must the company sell to achieve a pre-tax profit of $200,000?

• A.

50,000

• B.

20,000

• C.

13,000

• D.

66,667

Whats the margin of safety percentage if the company achieves the pre-tax profit of $200,000?

• A.

65%

• B.

91.67%

• C.

76.92%

• D.

8.33%