Question 1 Queensland Company makes radios that sell for $90 each. For the coming year, management expects fixed costs to total $295,200 and variable costs to be $45.00 per unit.

Calculate the break-even point in dollars using the contribution margin ratio.

Break-even point

$enter the break-even point in dollars

Question 2

Cottonwood Company reports the following operating results for the month of April.

COTTONWOOD COMPANY CVP Income Statement For the Month Ended April 30, 2020
		Total		Per Unit
Sales (8,200 units)		$410,000		$50
Variable costs		164,000		20
Contribution margin		246,000		$30
Fixed costs		210,000
Operating income		$36,000

Management is considering the following course of action to increase operating income: Reduce the selling price by 20%, with no changes to unit variable costs or fixed costs. Management is confident that this change will increase unit sales by 30%. Using the contribution margin technique, calculate the break-even point in units and dollars and margin of safety in dollars.

Assume no changes to selling price or costs. (Round answers to 0 decimal places, e.g. 125.)

Break-even point		enter a number of units	units
Break-even point		$enter a dollar amount
Margin of safety		$enter a dollar amount

Assume changes to sales price and volume as described above. (Round intermediate calculations to 2 decimal places, e.g. 15.25 or 15.25% and final answers to 0 decimal places, e.g. 125.)

Break-even point		enter a number of units	units
Break-even point		$enter a dollar amount

Calculate the margin of safety ratio assuming actual sales are $738,000.

Margin of safety ratio

enter the Margin of safety ratio in percentages %

Calculate the sales dollars required to earn operating income of $135,000.

Required sales

$enter the Required sales in dollars