True Blue produces a single product. The projected income statement for the coming year is as follows: Sales (25,000 units @ $37) $ 925,000 Total Variable Costs $(350,000) Contribution Margin $ 575,000 Total Fixed Costs $(125,000) Profit $ 450,000 Required:

a. Compute the break-even point in units and sales dollars.

b. Compute the new operating profit if sales are 20 per cent higher than expected. (Note: round to the nearest dollar).

c. If the variable cost became $18 per unit, what would the new break-even amount be in units? (Note: round to the nearest unit and dollar)

d. Explain what is meant by a margin of safety and what would this margin be if True Blue sold 28,000 units per year? (Note: use your answer from Part c.) [

e. What does the term relevant range mean. Give an example to support your answer (maximum of 200 words).