The Hampshire Company manufactures umbrellas that sell for $12.50 each. In 2014, the company made and sold 60,000 umbrellas. The company had fixed manufacturing costs of $216,000. It also had fixed costs for administration of $79,525. The per-unit costs of each umbrella are as follows:

Direct Materials: $3.00

Direct Labor: $1.50

Variable Manufacturing Overhead: $0.40

Variable Selling Expenses: $1.10

Compute net income before tax.

Compute the unit contribution margin in dollars and the contribution margin ratio for one umbrella.

Calculate the break-even point in units and dollars of revenue.

Calculate the margin of safety:

A. In units

B. In sales dollars

C. As a percentage

Requirement 1
	Units	Price	Totals
Sales	X	$	$
Variable Costs	X	$	$
Fixed Costs			$
Net Income			$
Requirement 2
Contribution Margin per Unit in Dollars = Selling Price Variable Costs
Selling Price		Variable Costs	Contribution Margin per Unit
Contribution Margin Ratio = Contribution Margin/Selling Price
Contribution Margin		Selling Price	Contribution Margin Ratio