Problem 4-36 Cost-Volume-Profit, Margin of Safety Victoria Company produces a single product. Last year's income statement is as follows: Sales (36,000 units) Required: $1,512,000 Less: Variable costs 907,200 Contribution margin 604,800 Less: Fixed costs 504,000 Operating income $ 100,800 1. Compute the BEP in units and sales dollars, using the contribution margin ratio. 2. What was the margin of safety for Victoria Company last year? 3. Suppose that Victoria Company is considering an investment in new technology that will increase fixed costs by $250,000 per year but will lower variable costs to 45 percent of sales. Units sold will remain unchanged. Prepare a budgeted income statement assuming that Victoria makes this investment. What is the new BEP in units and sales dollars, assuming that the investment is made?