SoundPro produces amplifiers for electric guitars. SoundPro has annual fixed costs totaling $250,000 and variable costs of $60 per amplifier. Each amplifier is sold for $75 each. Sound pro is currently selling 18,000 amplifiers. (this is the base case)

Answer the following questions regarding SoundPro:

1. Prepare a contribution format income statement for the base case.

2. How many units must be sold to earn an annual profit of $65,000?

3. What is SoundPros breakeven point in sales dollars?

4. What is the margin of safety in sales dollars?

5. What would be the operating profit (loss) if variable cost per unit increases 10 percent. (Assume sales remain at the base case level of 18,000 amplifiers).