Ratchet Ltd expects to sell 30,000 units this year. The selling price is set at $25 per unit. The variable cost per unit is $12 and annual fixed cost is $345,000. Assume a tax rate of 28%.

Required:

Calculate the following:

a. Break-even point in dollars.

b. Margin of safety in dollars.

c. Number of units Ratchet Ltd has to sell to earn an after-tax profit of $420,000.