Penury Company offers two products. At present, the following represents the usual results of a month's operations:

Product K Product L

Per Unit Per Unit Combined

Sales revenue $ 130,000 $ 1.30 $91,000 $ 0.91 $ 221,000

Variable expenses 65,000 0.65 65,000 0.65 130,000

Contribution margin $ 65,000 $ 0.65 $ 26,000 $ 0.26 $ 91,000

Fixed expenses 55,000

Net operating income $ 36,000

Required:
a.	Find the break-even point in dollars. (Round CM ratio to 2 decimal place.)

Break-even point in dollars

$

b.	Find the margin of safety in dollars.

Margin of safety in dollars

$

c-1.	The company is considering decreasing product K's unit sales to 85,000 and increasing product L's unit sales to 185,000, leaving unchanged the selling price per unit, variable expense per unit, and total fixed expenses. calculate the net operating income.

Net operating income

$

c-2.

Would you advise adopting this plan?

	Yes
	No

d.	Refer to (c) above. Under the new plan, find the break-even point in dollars. (Round your final answer to the nearest dollar amount.)

Break-even point in dollars

$

e.	Under the new plan in (c) above, find the margin of safety in dollars. (Round your final answer to the nearest dollar amount.)

Margin of safety in dollars

$