Sharp Company makes and sells pencil sharpeners. The variable cost of each sharpener is \($20\) . The sharpeners are sold for \($30\) each. Fixed operating expenses amount to \($40,000\) .

Required:

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

b. Determine the sales volume in units and dollars that is required to attain a profit of \($12,000\) . Verify your answer by preparing an income statement using the contribution margin format.

c. Determine the margin of safety between sales required to attain a profit of \($12,000\) and break-even sales.