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The following is Addison Corporation's contribution format income statement for last month: Sales $1,000,000 Less: Variable Expenses $ 700,000 Contribution Margin $ 300,000 Less: Fixed

The following is Addison Corporation's contribution format income statement for last month:

Sales

$1,000,000

Less: Variable Expenses

$ 700,000

Contribution Margin

$ 300,000

Less: Fixed Expenses

$ 180,000

Net Income

$ 120,000

The company has no beginning or ending inventories. A total of 20,000 units were produced and sold last month. Using this information, answer questions, 4-5.

4. How many units would the company have to sell to attain target profits of $150,000?

A) 22,000 units. B) 37,500 units. C) 25,000 units. D) 26,667 units.

5. What is the companys margin of safety in dollars?

A) $400,000 B) $600,000 C) $120,000 D) $880,000

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