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Question - Julia Child Company sells baby car seats to retailers for an average of $91 each. The variable cost of each car seat is $46 and monthly fixed selling costs total $7,000. Other monthly fixed costs of the company total $8,500.
Required -
1. What is the breakeven point in number of car seats?
2. What is the margin of safety, assuming sales total $48,000?
3. What is the breakeven level in car seats, assuming variable costs increase by 20%?
4. What is the breakeven level in car seats, assuming the selling price goes up by 10%, fixed selling costs decline by 10%, and other fixed costs decline by $1,000?
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