Sales (120,000 units) $7,500,000

Less: variable expenses $3,450,000

Contribution margin $ 4,050,000

Less: fixed expenses $3,375,000

Operating income $ 675,000

Calculate contribution mark per unit, and the break even point per unit

Contribution mark per unit=

Break even point per unit =

Compute the contribution margin ratio and calculate break-even point in sales dollars.

Contribution ration=

Break even in sales=

Using the original information, if sales revenue increased by $540,000. How much would profits increase?

How many units must be sold to earn an after tax profit of $1,254,000? Assume a tax rate is 34%

Compute the margin of safety in dollars based on the given income statement.