The 4 x 4 Shop is a large retailer of equipment for pickup trucks. An income statement for the company's bed liner department for the most recent quarter is presented below:

4 x 4 Shop

Income Statement Liner Department

For the First Quarter of the Current Year

Sales revenue (2,000 liners).		$700,000
Cost of goods sold.		250,000
Gross profit		450,000
Selling and administrative expenses:
Selling expenses	$195,000
Administrative expenses	145,000	340,000
Profit before tax		$110,000
Income tax (40%)		44,000
Net profit/income		$66,000

The liners sell, on average, for $350 each. The department's variable selling expenses and administrative expenses are $35 and $18.125 per liner sold. The fixed selling expenses and administrative expenses are $125,000 and $108,750 respectively. The company purchases its liners from a supplier at a cost of $125 per liner, which is considered variable expense.

Required:

a) What is contribution margin per unit of product? (Keep to 3-decimal places) (2 marks)

b) What is the companys breakeven point in units? (2 marks)

c) What is the companys margin of safety in units? (2 marks)

d) What is the dollar level of sales necessary to attain a target profit (profit before tax) of $200,000? (Round to the nearest unit) (3 marks)

e) What is the dollar level of sales necessary to attain an after-tax profit of $120,000? (3 marks)

f) If the company increases fixed selling expenses by $10,000 and variable selling expenses by $5 per unit, unit sales are expected to increase by 10% (200 units). Calculate the companys after-tax profit if these changes were to occur, assuming the same tax rate of 40% and unit selling price of $350). (3 marks)