Wiggit Manufacturing Company Ltd expects to sell 150,000 Wiggits this year. Expected cost and revenue data is given below.

Variable cost $300,000

Fixed cost $200,000

Revenue $600,000

Required

1. Calculate the margin of safety in dollar.

2. If the selling price increases 10 per cent and fixed cost falls 5 per cent recalculate the break-even

   point in units and in dollars.

3. Referring to the original data, if the desired net income is $56,000 what level of sales are needed?Assume a 30 per cent tax rate with the original data.