Stefanio Trucking distributes a single product. The companys sales and expenses for last month follow:

	Total			Per Unit
Sales	$	724,000		$	60
Variable expenses		380,800			38
Contribution margin		343,200		$	22
Fixed expenses		253,600
Net operating income	$	89,600

Required:

1. What is the monthly break-even point in unit sales and in dollar sales? (5 marks)

2. How many units would have to be sold each month to earn a target profit of $60,000? (5 marks)

3. Refer to the original data. Compute the company's margin of safety in both dollar and percentage terms. (5 marks)

4. Why is margin of safety important to many companies? Briefly explain. (5 marks)

5. How would you explain break-even analysis? (5 marks)