Patient Medical Products Ltd., manufactures a single product and has the following sales and expenses for the last year at a volume of 20,000 units. sales 400,000

less variable costs 300,000

contribution margin 100,000

less: fixed costs 40,000

operating income 60,000 Required:

1. Calculate Break Even in Sales dollars.
2. Calculate Break Even in Units.
3. Calculate the companys margin of safety in dollars.
4. Calculate the companys margin of Safety percentage.
5. Explain the relationship between the break-even point and net operating income with respect to the unit contribution margin for each additional unit sold.