Cost-volume-profit (CVP) Analysis

The formula to calculate target sales revenue is fixed cost + target profit divided by contribution to sales ratio, the contribution to sales ratio can be gotten by 84000-38640/84000 = this would equal 0.54.
Then your FC+Target profit divided by contribution to sales ratio would equal39975+12000/0.54=96250

A company plans to sell 50,000 units of its single product, in the next period, at a selling price
of $16 per unit. Using the existing production process, fixed overheads and net profit for the
next period are expected to be $100,000 and $300,000 respectively. The company is
considering a change to its production process. The change would increase the fixed overheads
by $60,000 in the next period and reduce the variable costs to $7 per unit. The selling
price will remain constant regardless of production process. Production capacity in both the
existing and changed processes would be 80,000 units in the period.
Required
(a) For the existing production process, calculate for the next period the expected:
(i) break-even point in units
(ii) margin of safety as a % of sales
(iii) contribution sales ratio.
(b) Advise management, using supporting calculations, whether to change the production
process if the sales are 50,000 units in the period.
(c) Advise management, using supporting calculations, of the sales level (units) at which the
changed and existing process profits would be the same.
(d) Identify three limitations of break-even analysis.

Is that variable cost before change is $5?