Swifty manufactures and sells swimsuits for $40.00 each. The estimated income statement for 2017 is as follows:

Sales			$2,000,000
Variable costs			1,030,000
	Contribution margin		970,000
Fixed costs			795,000
	Pretax earnings		$175,000

Compute the contribution margin per swimsuit and the number of swimsuits that must be sold to break even. (Round contribution margin per swimsuit to 2 decimal places, e.g. 15.25 and break even swimsuits to 0 decimal places, e.g. 125.)

Contribution margin		$	per swimsuit
Break even			swimsuits

What is the margin of safety in the number of swimsuits?

Margin of safety

swimsuits

Compute the contribution margin ratio and the breakeven point in revenues. (Round contribution margin ratio to 3 decimal places, e.g. 0.256 and breakeven point to 0 decimal places, e.g. 125.)

Contribution margin ratio
Breakeven point		$

What is the margin of safety in revenues? (Round answer to 0 decimal places, e.g. 125.)

Margin of safety

$

Suppose next years revenue estimate is $140,000 higher. What would be the estimated pretax earnings?

Estimated pretax earnings

$

Assume a tax rate of 30%. How many swimsuits must be sold to earn after-tax earnings of $240,000? (Round answer to 0 decimal places, e.g. 125.)

Pretax profit

swimsuits