Units and Sales Dollars, Margin of Safety Break-Even Drake Company produces a single product. Last year's income statement is follows: Sales (20,000 units) $1,218,000 Less: Variable costs 812.000 Contribution margin $406,000 Less: Fixed costs 300.000 $106,000 Operating income Required: 1. Compute the break-even point in units and sales revenue. n your computations, round the unit contribution margin and the contribution margin ratio to four decimal places. Round your final answers to the nearest whole unit or dollar. Break-even units 14,778 units Break-even dollars 2. What was the margin of safety in dollars for Drake Company last year? Round your final answer t the nearest whole dollar. 3. Suppose that Drake Company considering an investment in new technology that will increase fixed costs by $250,000 per year, but will lower variable costs to 45 percent of sales. Units sold will remain unchanged. Prepare a budgeted income statement assuming Drake makes this investment. 3. Suppose that Drake Company is considering an investment in new technology that will increase fixed costs by $250,000 per year, but will lower varia ble costs to 45 percent of sales. Units sold will remain unchanged. Prepare a budgeted income statement assuming Drake makes this investment Drake Co Budgeted Income Statement Sales 1.218,000 Less: Variable costs 548,100 Contribution margin 669.900 Less: Flxed costs -550,000 Y Net income Feedback What is the new break-even point in units, assuming the investment is made? In vour computations, round the unit contribution margin to three decimal places, Round your final answer to the nearest whole unit. units