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The budgeted data of a company is given below.
Per unit ($)
Selling price 120
Budgeted production and sales are 5,000 units and fixed costs are $60,000.
1. What is the break-even point?
2. What is the total profit?
3. What is the margin of safety?
Contribution per unit = 120 – 36 – 22 – 20 = 42.
You should be able to solve these basic questions easily if you read Chapter 8 of our MA2 notes.