1. R Ltd has made the following estimates for the month:

selling price $25 per unit $20

variable cost $10 per unit

Fixed costs for the month $300,000

Forecast output 30,000 units

If the selling price were to be reduced to $20 per unit, then sales would be increased to the maximum output of 40,000 units.

For both strategies, you are required to calculate the

1. profit volume ratio:
2. break-even point in units
3. break-even point in sales revenue FC/PV ratio
4. margin of safety at the forecast output
5. the number of units to generate a profit of $100,000