Reference no: EM131673785

Question: Break-Even Units, Contribution Margin Ratio, Margin of Safety Tensing Company's projected profit for the coming year is as follows:

                                                   Total                   Per Unit

Sales                                       $11,700,000                $20

Total variable cost                          8,190,00                 12

    Contribution margin                $  3,510,000                $ 8

Total fixed cost                             2,254,200

    Operating income                  $   1,255,800

Required: 1. Compute the break-even point in units.

2. How many units must be sold to earn a profit of $450,000?

3. Compute the contribution margin ratio. Using that ratio, compute the additional profit that Tensing would earn if sales were $37,000 more than expected.

4. For the projected level of sales, compute the margin of safety in units.