Parrott Company operates with a single product. The following simple income statement relates to last year when sales units totaled 20,000.

Total $ Per unit $

Sales 270,000 13.50

Variable expense 180,000 9.00

Contribution margin 90,000 4.50

Fixed expenses 49,500

Net operating income 40,500

a. What is Parrott Company's breakeven point in units and $ ?

b. What was Parrott Company's margin of safety for last year in percentage, units, and dollars?

c. If Parrott increased quality by using materials that would raise its variable expense per unit by $0.50, complete a new income statement for Parrott if they sold 12% more units this year.