Stylo Ltd produces a special video tech product with the following annual data for next year:

Selling price per unit	$1 200
Variable cost per unit	$400
Expected unit sales	1000
Fixed costs	$500 000

Required: ** SHOW YOUR WORKINGS FOR ALL SECTIONS

1 How many units in total must be sold to break even?

2 MAKE a contribution margin income statement for next year when they expect to sell 1 000 units.

3 What is the expected safety margin in units if it sells 1 000 units next year?

4 Should management be concerned about the safety margin calculated in (b)? Explain your answer.

5 What dollar sales will Stylo Ltd need to generate in order to realize a target profit of $600,000?