Polk Company developed the following information for its product:

	Per unit
Sales Price	$90
Variable cost	54
Contribution Margin	$36
Total Fixed cost	$1,260,000

Instructions

Answer the following independent questions and show computations using the contribution margin technique to support your answers.

a. How many units must be sold to break even?

b. What is the contribution margin ratio?

c. What is the total sale dollars that must be generated for the company to earn a profit of $60,000?

d. If the company wants to earn $45,000 after taxes and is subject to a 30 percent tax rate, how many units will it have to sell?

e.What is the margin of safety in dollars?

f. If the company is presently selling 45,000 units, but plans to spend an additional $90,000 on an advertising program, how many additional units must the company sell to earn the same net income it is now making?

g. If actual sale in dollars is $3,300,000 what is the margin of safety in dollars?