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ABC Inc. recorded the following information for June 2021:
Sales $900,000
Manufacturing costs 630,000
Gross profit 270,000
Selling & administrative costs 180,000
Operating profit $ 90,000
Problem 1) For both the current situation and the option described, calculate:
The break-even point in unitsContribution margin percentageThe degree of operating leverageThe margin of safety
Problem 2) Referring to your calculations above, discuss whether or not you think the company should build the new factory.
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