Reference no: EM133056434

Question - A. Greenfield Printers manufactures three computer printer models: Inkjet, Laser, and Impact. Total annual fixed costs are $4,900,000. Other information for the three printers is as follows:

	Inkjet	Laser	Impact
Selling price per unit	$250	$400	$1,600
Variable cost per unit	$100	$150	$800
Sales mix	60 percent	30 percent	10 percent

Assume that the sales mix does not change.

Required - Calculate

i. How many units of each printer must be sold to break even?

ii. How many units of each printer must be sold to earn an annual profit of $1,112,300?

iii. How many units of each printer must be sold to achieve an after-tax profit of $73,500. The tax rate is 40%.

B. Management of Posh Automobile wants to know the margin of safety for a piece of equipment it is purchasing. They have established that the break-even revenue will be $3,957,188 while annual sales will be $4,200,000.

Required - Calculate

i. Margin of safety in dollars ($)

ii. Margin of safety in percentage (%).