Watt Company produces two products. Budgeted annual income statements for the two products are provided here:

Power

Lite

Total

Budgeted

Per

Budgeted

Budgeted

Per

Budgeted

Budgeted

Budgeted

Number

Unit

Amount

Number

Unit

Amount

Number

Amount

Sales

200

@

$

500

=

$

100,000

800

@

$

560

=

$

448,000

1,000

$

548,000

Variable cost

200

@

290

=

(58,000

)

800

@

380

=

(304,000

)

1,000

(362,000

)

Contribution margin

200

@

210

=

42,000

800

@

180

=

144,000

1,000

186,000

Fixed cost

(12,000

)

(99,600

)

(111,600

)

Net income

$

30,000

$

44,400

$

74,400

a

a)

	Power	Lite	Total
Sales
Variable costs
Contribution margin
Fixed cost
Net income (Loss)

b) verify the margin of safety

Margin of safety

%