Viejol corporation has collected the following information after its first year of sales. Sales were 1,600,00 on 100,00 units, selling expenses 250,000 940, variable and 60% fixed) direct materials 490,00, direct labor 290,000, administrative expenses 270,000 ( 20% variable and 80% fixed), and manufacturing overhead 380,000( 70% variable and 30% fixed). Top management asked you to do a CVP analysis so that it can make plans for the coming year. It has projected that unit sales will increase by 10% next year.

1. compute contribution margin for the current year and projected year, and compute the fixed costs for the current year. ( assuming fixed costs will remain the same in the projected year.

2. compute the break-even point in units and sales dollars for the current year

3. the company has a target income of200,000. What is required sales in dollars for the company to meet its target?

4. if the company meets its target income number, by what percentage could its sales fall before it is operating at a loss. What is the margin of safety ratio?