Calculate the break-even point and the margin of safety

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Reference no: EM132901157

A company has fixed costs of $300,000 and produces one product with a selling price of $72.00 and a variable cost of $42.00 per unit. The maximum factory capacity is 20,000 units and it anticipates selling 16,000 units.

1. Calculate the break-even point and the margin of safety at present.

2. How much profit will they make at the present level of operation?

3. If sales increase to the maximum that the factory can supply?

4. What is the BEP if the price increased to $80 and variable cost becomes $55, calculate BEP and the maximum possible profit with maximum factory capacity?

Reference no: EM132901157

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