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Break-Even in Units and Sales Dollars, Margin of...

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Accounting

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Break-Even in Units and Sales Dollars, Margin of Safety Drake Company produces a single product. Last year's income statement is as follaws: 1. Compute the breakeven point in units and sales revenue. In your computations, round the contribution margin per unit to the nearest cent and round the contribution margin rato to four decimal places. Round your final answers to the nearest whole unit or dollar. 2. What was the margin of safety in dollars for Drake Company last year? Round your final answer to the nearest whole dollar. 3. Suppose that Drake Company is considering an investment in new technology that will increase fixed costs by $234,200 per year, but will lawer variable costs to 44 percent of sales: Units sold will remain unchanged. Prepare a budgeted income statement assuming Drake makes this investment. Round all amounts to the nearest dollar. What is the new break-even point in units, assuming the investment is made? In your computations, round the unit contnbution margin to the nearest cent. Round vaur final answer to the nearest whole unit. units

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