The administrator of the Buena Vista Company wants to know the contribution margin and the operational leverage of the company and provides you with then following information.

Assumes sales were 10,000 units:

a. Determine the break-even point in units and dollars. Illustrates the computations.

b. Calculate the number of units that the company must sell if you want to earn $32,000. Illustrates the computations.

c. Calculate the safety margin assuming sales of 10,375 units. Illustrates the computations.

Selling price per unit Fixed costs Administrative salaries Rent expense Depreciation expense Total fixed costs Variable costs Raw material Direct labor Variable overhead Total variable costs Quantities Quantities per unit Total $80.00 180,000 90,000 30,000 $300,000 15.00 22.00 11.00 S4800